04 August 2012FWBC Chief Executive's speech to the IRSWA State Conference: "Cooperative, harmonious and productive" in practice

**check against delivery**

New services and partnerships to increase productivity in Australia’s building and construction industry

Leigh Johns, Chief Executive, Fair Work Building & Construction

I acknowledge the traditional owners of the land upon which this conference takes place; the Wardandi people, their elders past and present.

I acknowledge the continuing cultural importance and spiritual significance of the Margaret River region to the Indigenous people of this community.

Introduction

Good afternoon. I am very pleased to be back in Western Australia and I thank the organising Committee for inviting me to speak at this conference which has provided me with the opportunity to once again cross the Nullarbor.

However, when in January I accepted the invitation to speak at this conference I could not have known, then that, the day before this address, the Government would release the Review of the Fair Work Act 2009. I don’t consider that to be fortuitous. Although I have read large parts of the Report overnight, my speech should not be viewed as a contribution to the range of commentary that has been made about the Review in the last 24 hours. Neither I nor my agency made a submission to the Review and we did not seek to be a part of the consultations. Consistent with that approach, I have no intention of being a post-event commentator.

We are fortunate, in Australia, to have thriving, robust IR Societies in every state. It is always particularly enjoyable to attend, and present at, Industrial Relations Society events because independent, non-partisan societies like yours have an important role to play in promoting excellence in workplace industrial practices and in encouraging discussion and debate on the wide range of issues affecting the employer employee relationship. It’s this discussion I want to contribute to today.

I don’t need to tell a room full of Western Australians of the importance of WA to our nation’s economy and of its long history as a mining State. It’s a history I have a connection with. I’m the grand-son of miners on both sides of my family and the great-great grandson of another miner, Thomas Rapson Johns, who emigrated from the civil parish of Helston in Cornwall, England to Western Australia with his young family in around 1877 in search of gold. He wasn’t a fly-in fly-out worker. He stayed in WA for about 4 years before trying his luck on the East Coast and settling in the (then) mining town of Bendigo where I was born four generations later.

And so, for more than 130 years WA has been the State of promise and opportunity; from the gold rich towns of Coolgardie and Kalgoorlie in the 1890s to the iron ore rich towns of the Pilbara today – where my own brother is a fly-in fly-out worker.

Last month I was in Port Hedland and Karratha and had the opportunity to visit three different construction sites of a scale that is incomprehensible until you see them. Each of them connected to the resources sector. There in the red dirt of the Pilbara or the pristine environment of Barrow Island you can understand why it is so essential that construction work is undertaken:

  • Productively - free from unprotected industrial action, right of entry breaches and breaches of freedom of association; and
  • Fairly - so that workers aren’t getting ripped off or subjected to the indecency of sham contracting.

Our building and construction industry also makes a significant contribution to the national economy. The mineral and energy construction industry continues to grow, with more growth projected. Here in Western Australia more than A$180 billion resource projects are either committed or under construction in the next few years.

Western Australia’s construction industry contributes more than 11.7% of the Gross State Product and employs 10.51% of the State workforce, or about 131,000 people – one of the largest employing industries. The industry also employs approximately 41% of all apprentices in the state.

This context is important because it underscores the need for and the very existence of a specialist regulator of workplace laws in the building and construction industry.

The most recent iteration of the specialist regulator, charged with promoting fair and productive workplaces in Australia’s building and construction industry, is Fair Work Building and Construction (or FWBC as it is known).

FWBC commenced operation on 1 June 2012 and has been flat out since day one. We are determined to be an open, transparent, engaged and visible regulator and in the eight weeks since we commended operations we have conducted 441 site visits and responded to 281 enquiries from industry participants. In WA alone we have undertaken 116 site visits. For my own part, I have met and spoken with representatives of in excess of 120 stakeholders in the industry from all constituencies.

Working with the senior leadership of FWBC, Brian Corney as FWBC’s Chief Counsel and Michael Campbell as our Chief of Field Operations, and my other 154 colleagues, we are determined to deliver comprehensive regulation and advice services to everyone in the industry.

Today I am going to speak about FWBC’s role and strategic focus. I will also speak about FWBC’s regulatory approach, and (at the risk of being seen to jump on the ‘productivity band-wagon) I’d like to advance a few ideas and encourage further debate by examining some models and steps already taken to support cooperative workplace paradigms and enhance productivity.

Fair Work Building and Construction – continuous service delivery

FWBC was established by the Building & Construction Industry Improvement Amendment (Transition to Fair Work) Act 2012 which renamed the former Building and Construction Industry Improvement Act 2005 the Fair Work (Building Industry) Act 2012 (FWBI Act). Accordingly, the FWBI Act is now the relevant governing legislation operating in concert with the Fair Work Act 2009 (FW Act 2009).

The commencement of FWBC is more than just a name change. The functions that the Director of FWBC is invested with by virtue of section 10 of the FWBI Act necessitate that the agency broaden and extend its scope of advice and regulation services and the way in which those services are delivered.

For example, FWBC has a broader remit in terms of its obligation to provide advice, assistance and education about harmonious, productive and cooperative workplace relations in the building industry.

We must give life to that obligation and find a meaningful way for the regulator to dedicate resources aimed at moving workplace relations parties away from the adversarial approaches of the past.

Importantly, FWBC is an independent statutory body. It is well resourced, entrusted with $32m of tax-payers money each year. It is fully staffed with personnel experienced in the building and construction industry and has a presence in every capital city.

FWBC has a mandate to investigate and litigate across the full range of civil penalty breaches in the FW Act. However, our regulatory focus will be on six key areas of concern:

  • Unprotected industrial action;
  • Freedom of association;
  • Coercion;
  • Right of entry;
  • Wage and Entitlements; and
  • Sham contracting.

In addition, as a part of our new business plan for FY 2012-2013, we have a strategic goal to investigate and commence litigation in relation to 3-5 areas of workplace law compliance infrequently, or not previously, pursued.

Consequently, employers can be expect that FWBC focussing on specific breaches like:

  • s.44 – breach of NES;
  • s.45 – contravening a Modern Award;
  • s.50 – contravening an EA (other than by a dispute settlement procedure);
  • s.351 – discrimination;
  • s.421 – breach of s.418 order;
  • s.342(1) – adverse action (e.g. adverse action taken by employers against employees);
  • s.712(3) – failure to comply with a notice; and
  • s.535 – employer obligations in relation to employee records.
  • In expanding the public value that we return on the investment made in us by the Australian tax-payer, FWBC will broaden its service delivery offering, but with no reduction or noticeable shift for the end-user in the services they had been accustomed to receiving from our predecessor agencies.
  • My senior executive team and I have given deep consideration to how best, as a full-service regulator, to regulate the industry in a way that builds the capacity of those that want to observe the laws, and take action against those that deliberately defy them.
  • In this regard we will build upon the changes in our operating capability, implemented since October 2010, which have included:
  • investigating claims of underpayment in the industry and ensure all workers were being paid as they ought to be;
  • inquiring into and commissioning real research into sham contracting;
  • commencing a coordinated national targeted campaign of pro-active audits (so that the agency is not solely a ‘reactive’ agency to complaints brought to it);
  • improving the educational capacity of the agency to ensure that workers and smaller operators have the information they need about workplace laws;
  • the merging of the Field Operations and National Code functions to increase the overall capacity and flexibility of the agency’s workforce;
  • establishing a mediation function to assist voluntary resolution of claims;
  • introducing a file quality review function and policy team under the umbrella of “Professional Standards”;
  • adopting a national Operations Manual closely aligned with that the Fair Work Ombudsman so that there is national consistency across the two agencies responsible for labour regulation;
  • publishing a range of Guidance Notes, most importantly in relation to our Litigation Policy;
  • building the capacity of our internal data-evaluation tools to ensure that agency performance is more rigorously and accurately reported;
  • adopting more ambitious KPIs to ensure that investigations are completed more quickly and litigation is commenced in a more timely manner; and
  • deepening relationship with other agencies like the FWO, ASIC and the ATO to enhance information sharing, best practice and whole of government approaches to difficult regulatory problems.
  • FWBC is created by the FWBI Act, but we work within a broader regulatory framework that includes the FW Act and our continuing role monitoring and ensuring compliance with the National Code of Practice for the Construction Industry.
  • Our regulatory approach involves acting as a point of reference for workers and employers in the building and construction industry, so people can come to us to find out ‘what they need to find out’ about compliance across the spectrum.
  • We will make use of a full suite of regulatory options. We will negotiate enforceable undertakings, conduct robust investigations, take civil penalty litigation in the courts and tribunals and seek orders for compensation for those affected by unlawful behaviour.
  • FWBC will also look for new ways to work with the industry to provide tailored regulatory solutions for both the problems and the opportunities unique to our industry.

Productivity – from enigma to outcomes

Productivity seems to be the ‘new black’ in our workplace relations dialogue. The volume of discussion and debate about productivity and its relationship to industrial practices has amplified exponentially in recent months.

Productivity has been expounded in business, political and economic circles. The Australian Industry Group is talking about it; the ACTU is talking about it; the governor of the Reserve Bank, the Treasury secretary and, not surprisingly, the Productivity Commission is talking about it. It is spoken about daily in the context of the NBN, the skills agenda, manufacturing reform, the mining boom, labour force participation and regulation.

I too have been getting in on the act talking about mechanisms for generating productive workplaces. It is very clearly a part of the function of FWBC under the FWBI Act to provide a framework that facilitates productivity for the building and construction industry and the national economy.

When it comes to productivity Australia has fallen well back in world rankings. This is the problem we must all engage with if we want to secure greater living standards for all Australians.

It’s true that rapid resource outlays (primarily here in WA) have created an investment lag that will continue to negatively impact our productivity numbers in the medium-term, but this does not excuse the reality of our aging population and slowing terms of trade in the longer-term.

So, how must we change what we are doing and ensure a strong growth trajectory? Do we need structural or regulatory change? Should it be market-driven change? Or collectivised change? Or, should it be all of the above?

From the outset I should say that I am unaligned on the issue of “who is at fault,” when we examine laggard productivity data. In fact, not only do I think it is the wrong question, I think a focus on finding who to blame is unhelpful because we need everyone to pull together to devise the solution.

My experience in the construction industry is that companies and managers are alert to the fact that it is utterly unsustainable to increase production simply by expecting your workers to miss tea-breaks or do unpaid overtime.

I also see that employees in the construction industry are invested in their companies and are prepared to devote their competencies, collaborate with their employers and deliver world-class projects.

The reality is that on building sites and civil engineering projects across this country we are seeing real life examples of ‘harmonious, productive and cooperative workplace relations’, but we need to see more of it.

At the macro level we need to move beyond a prevailing polarised story – which is: either it’s “all the manager’s fault” and Australian companies just hire bad managers; or it’s all the fault of the particular legislation of the day.

Speaking as then president of Fair Work Australia last year at the Australian Labour and Employment Relations Association conference, Justice Giudice examined ABS multifactor productivity and labour productivity data of the last two decades. The data presented highlighted how problematic it is to establish any reliable causal-link between productivity and any of the legislative industrial relations regimes of any given the period.

More recently (yesterday) the FW Act Review Panel concluded it,

was not satisfied that there is evidence to support this explanation [that the productivity pattern could be explained by the differences between the particular industrial relations frameworks]. Productivity growth accelerated under the IR Act post-1993 and the early years of the WR Act but then slowed. Labour productivity continued to grow at a subdued pace under Work Choices, but multifactor productivity declined under both that framework and the FW Act. Over the two decades labour productivity growthwas slowest under Work Choices, which arguably imposed the fewest constraints on management decisions. Of the four frameworks, the FW Act is most similar to the IR Act post-1993. While productivity flourished in the IR Act post-1993 period, however, it has grown only slowly under the FW Act. Differences between the legislative frameworks evidently do not explain the differences in productivity growth over those periods.

That is not to say workplace laws are unimportant, but clearly it is not going to provide the entire solution, a point well made this week by NAB CEO, Cameron Clyne, at an American Chamber of Commerce lunch. It is also point demonstrated by the relevant construction data.

The measure of productivity growth commonly reviewed is multifactor productivity.

The Productivity Commission defines ‘multifactor productivity’ as “the ratio of (the real value of) output to the combined input of labour and capital”.

The chart below demonstrates multifactor productivity in the construction industry by comparing the Labour Productivity Index against the Capital Productivity Index. The ABS notes that it is problematic to attempt to compare annual or quarterly productivity figures, - the context for comparison must be considered in longer cycles.

**note: Table graphic available in print-friendly version**

I should note that this data includes residential construction data, (where FWBC has no jurisdiction), nonetheless you will see in this chart that growth in the capital-labour ratio has been relatively slight over the last two and a half decades, with some increase in labour productivity and capital productivity relatively stationary.

This chart demonstrates a decline in multifactor productivity between about 1990 and 1995, but we saw some strengthening labour productivity in the noughties, an overall increase between each cycle since about 1995. In 2010-11, multi-factor productivity in the construction sector rose by two per cent per annum, which is above the long term average increase of 1.2 per cent per annum.

We can also consider ABS Labour Productivity data for construction, measured as gross value add (GVA) per hour worked.

**note: Table graphic available in print-friendly version**

This chart shows gross value add per hour worked has steadily improved in construction over the past two decades. Between 2000 and 2011 there has been a 2.5 percent increase in labour productivity, which compared to the figures for mining and utilities (mining -6.5% and utilities -4.8%), is relatively stable.

Labour productivity in the construction sector across Australia is higher than for a number of other industries, including transport, wholesale trade, hospitality, and finance and insurance.

When we examine this data decade on decade it is very difficult to extrapolate that one particular industrial legislative regime or another has significantly impacted the bigger picture, especially in the construction sector. Taking any macro economy-wide or industry-wide assessment and matching it up beside workplace relations regulatory mechanism is ill-advised.

**note: Table graphic available in print-friendly version**

Similarly, when we look at industrial dispute data in recent years, the contributing factors when it comes to stoppages due to industrial action are multifarious. It would be a somewhat crude hypothesise to suggest that legislative levers are exclusively responsible for particular peaks or troughs. We see that on and off construction has dipped below the all industries average there are a range of factors that are likely to have contributed to this rise and fall in industrial disputes, including the strong economic environment which has generated strong wages growth in the construction sector.

I defy anyone to draw a rational link between the data here as it relates to the construction sector and any legislative change in the corresponding periods.

Revisiting the role of institutions

FWBC is a new agency. Just as Fair Work Australia President, Justice Iain Ross AO, has indicated a new agenda for FWA, so it is appropriate to articulate a new agenda for FWBC.

The Judge has articulated an exciting vision for FWA. Last week he introduced a code of conduct and new benchmarks related to timeliness and performance. He has redefined the role of the tribunal and advocated for a rebranding. He has established his commitment to encouraging mature debate between employers and industrial representatives about our productivity and competitiveness as a nation. He has already set-up a Major Projects Panel to address productivity concerns in mining and major infrastructure.

In Justice Ross we have a leader of the national tribunal eager to engage with business from a position that is not just the other side of the bar table.

At FWBC we are also structuring our regulatory program around opportunities to improve the way we respond to the needs of building industry participants and encourage productivity.

At Fair Work Building and Construction the questions we concern ourselves with when we make decisions about our regulatory program and service offerings are:

  • What new kinds of partnerships need to be occurring in the building and construction industry to develop a shared vision of workplace productivity in a modern economy?
  • Are businesses able to both identify and implement best practices and innovate in our industry? If not, why not?
  • How should we measure success when it comes to improving productivity? (Obviously concrete gains in GDP provide an overarching success predictor, but there are other markers of success on the road to increasing multifactor productivity that require further definition).

The challenge of "cooperative, harmonious and productive workplace relations" confronts us all with the need to consider and explore an alternate frame; one that doesn't blame managers for being hopeless on the one side and blame the IR system on the other.

Institutions like FWA, the Fair Work Ombudsman and FWBC can play a coordinating and enabling role. One of FWBC’s new areas of focus has been examining where there are information barriers in our industry. That is, we are developing new targeted programs to make sure participants in the building and construction industry are empowered with the information they need - not only comply with workplace laws, but to implement best practice.

This expanded view of the role that can be played by FWA, FWO (and, I would add, FWBC) finds support in the findings of the Panel reviewing the FW Act,

The Panel has concluded that there is scope to increase the emphasis on the encouragement of productivity in the operation of the institutions created under the legislation.

....

The Panel believes that there is now an opportunity to extend the role of the national industrial relations institutions. It recommends an enhanced and active role for FWA and the FWO in encouraging more productive workplaces.

....

The Panel recommends that FWA and FWO play a more active role in encouraging productivity awareness and best practice.

An enabling regulator – a more productive industry

These views of the Review Panel are consistent with my own. I also agree that amendments to the FW Act are not required to implement these recommendations.

Over the next twelve months FWBC will continue to improve the quality of the services we deliver and the way that we deliver them. We will continue working to make sure we create new resources that are practical, accessible and relevant:

  • We will be improving the quality of our online information and resources.
  • We will be building the capacity of our inspectorate to act as brokers and facilitators, as well as investigators.
  • We will be focussed on making sure we are recognisable and have strong relationships in the community that we regulate; and
  • We will provide targeted information and advice to specific segments of the industry like apprentices, small-businesses and independent contractors; and
  • We will be working with people in the industry to devise new educational resources and service offerings. For example, later this year we will launch an information campaign targeting apprentices to help them access all of the facts and information they need about workplace rights and responsibilities. We are also supporting diversity in the building and construction industry by improving our service delivery to Culturally and Linguistically Diverse, or CALD participants. In April we conducted a series of community consultations with CALD industry members, and are using the insights gathers to develop a number of in-language tools and videos that will be housed on our new website.

Accessible tools and resources are essential. In the building and construction industry many of our clients, especially smaller operators, have limited time during regular business hours to sit in front of a computer or be on the telephone resolving workplace governance issues. So to make sure our educational services are accessible and relevant we will be increasing the resources we provide online, and considering devising interactive online advice services – accessible 24/7 – business tools that will act as an adjunct to the services already provided by unions and employer organisations.

FWBC’s work to facilitate productivity in the building and construction industry is important. If we address inefficiencies in construction, other industries are enabled to follow suit, in particular those industries that need infrastructure to be productive, like mining, transport and the services sector. With a high-performing national construction industry, we are well on the way to having a high-performing national economy.

New models to support productivity

I should also say, however, that in construction there are a number of unique industry-specific variables that we take into account when we talk about productivity. The level of subcontracting that occurs needs to be factored-in. Whenever we talk about efficiency gain in our industry, we also need to acknowledge that work processes are only centralised to the extent that a head contractor can practically dictate. Subcontractors plug in and out of work processes as required. There is also a long history of collectivised negotiation and combative bargaining in construction, which we must acknowledge, (but not necessarily perpetuate). Each industry and sector has distinct considerations when it comes to devising effective strategies to boost productivity.

As the industry regulator, we are looking to results-driven examples even if they come from overseas.

In May FWBC Chief of Field Operations Michael Campbell and Fair Work Ombudsman Nicholas Wilson, (along with other representatives from FWO) met with senior executives of the United Kingdom’s Advisory, Conciliation and Arbitration Service (ACAS) which carries out a best practice advisory function.

ACAS is a government funded, yet non-departmental and independent body that implements UK workplace laws and offers services to employers, employees and employment relations practitioners. It issues publications and provides training dealing on the model workplace. It issues tips for better management, self-check tools for industry, performance snapshot information and online learning modules.

ACAS is a 900-employee-strong organisation, established in 1975. It describes its charter as helping “employment relations by supplying up to date information, independent advice and high quality training, and working with employers and employees to solve problems and improve performance.” Its long-standing reputation is now a part of its success. It delivers five core functions to meet its charter – collective conciliation, individual conciliation, pre-claim conciliation, guidance and advice and arbitration.

The prioritisation of dispute resolution by ACAS – and early dispute resolution at that, means ACAS creates value not only by conciliating disputes, but by creating programs and services that actually prevent disputes.

Recent economic analysis shows the estimated value of ACAS’ dispute resolution work to the UK economy sat at £158m. With operating cost of £1.6m, early dispute resolution creates a positive cost/benefit ratio of 98.8 percent.

ACAS deliberately sets out to find partners who can help the organisation deliver its objectives. It engages with stakeholders about many attributes of its work including legislative interpretations and issues, political and social trends and what they mean for the organisation and its work, development of resources and guidance materials and ACAS’ service delivery strategies.

At FWBC we are investing in new methods that allow increased two-way dialogue between our agency and the industry we regulate. Our belief is that FWBC’s capacity to continually improve its regulatory work, and ultimately, best equip the industry to comply with the law; is dependent on regulatory solutions being devised in response to knowledge and understanding about the needs and circumstances of the people in the industry that we regulate.

I also want FWBC to investigate ACAS’ model of pre-claim conciliation processes and broader dispute resolution services that might be applied to calls to our info-line. We should also develop our capacity to offer individual dispute resolution for claims made to FWBC in respect of wages/conditions, discrimination, adverse action and sham contracting.

FWBC can, I think, also learn from ACAS’ approach to the provision of education services as we set about broadening the way we build capacity in Australia’s building and construction industry.

We are building new knowledge management tools that actively seek and act on information from the industry – so our advisers are well-informed about emerging issues, and we can act as an information conduit to keep our partners and clients well-informed.

Great people create outcomes, great teams create productivity

A recent study conducted by the University of Queensland for Abigroup, aimed at identifying psychosocial risk factors in construction workplaces shows ‘task interdependency’ is a significant positive predicator of well-being and job satisfaction.

Contrary to expectations of the researchers, ‘task interdependency’ (or the sharing of information, materials and expertise based on individual capability); enhances, rather than erodes, psychological welfare in our industry. People feel strongest job satisfaction when they are working collaboratively to achieve shared successes.

So does lifting productivity come down to an employer’s capacity to generate a shared desire for success?

I suspect that is part of the solution.

Looking to the UK once again (appropriately in this Olympic year), the UK Commission for Employment and Skills maintains a management standard and support service called ‘Investors in People,’ which specialises improving business performance through quite literally, supporting employers and in turn, employees. Over a third of the UK’s workforce uses Investors in People and the organisation drives innovation by providing a range of unique business survey and assessment tools as well as tailored advice on business improvement, at minimal cost. A key component of the Investors in People model is an assessment of whether:

  • Managers are effective in leading, managing and developing people; and
  • People are encouraged to take ownership and responsibility by being involved in decision-making.

Here in Australia the Society for Knowledge Economics, a not-for-profit company, founded by Microsoft Australia and Westpac Banking Corporation in June 2005 (as an initiative of the Australian Government Consultative Committee on Knowledge Capital) provides leadership and research to Australian industries about forward-thinking management cultures and practices. Their vision is to position Australian workplaces as the most innovative, productive and fulfilling in the world. Their ‘Workplaces of the Future’ forum, held in December last year, has as its convening question, “how can we make Australian Workplaces more participative, fair, innovative, productive and sustainable by better utilising the skills and potential of every person at work?"

At Macquarie University’s Centre for Workplace Futures, Professor Paul Gollan is currently partnering with researchers and consultants to deliver ‘The Voice’ project, a three year study of the impact of employee participation on organisational performance. The project aim is to channel findings into creating practical guidance for employers about how to establish participative practices at the enterprise level. As well as surveying businesses for the substantive research, ‘The Voice’ team provide direct diagnosis, advice and tools to assist government, private and non-profit organisations improve their business processes by ‘giving people a voice’.

These are only a few examples of solution-focussed actions happening in this space. Fostering healthy workplace cultures and lifting management skills, without ‘blaming the bosses’ our economy will be better-placed to define shared successes, and by doing so, boost productivity.

Skills Australia’s recent report ‘Better use of skills, better outcomes’ identified a number of workplace dynamics that support and reinforce productivity and are considered ‘critical success’ factors underpinning skills utilisation. They are:

  • Leadership and management – effective and accountable leaders encourage innovation and successfully steer firms through workplace change.
  • Organisational culture and values – a consistent organisational culture and a supportive, inclusive workplace encourage employees to contribute their ideas.
  • Communication, consultation and collaboration – involve everyone and actively listen to employee’s ideas. Be transparent with information to give staff a sense of how their work contributes to the business.
  • Good HR practices – provides a supportive workplace, which encourage staff to maximise their contribution.
  • Employee motivation – the more employees feel that they are valued, the more likely they are to contribute to a company’s success.

It seems to me that the consistent theme in all these studies is the importance of communication and employee engagement. A point emphasised recently by IR Consultant Grace Collier in the Australian Financial Review, who reflected on recent disputes and concluded (in her usual colourful way) “all roads lead back to the original solution: talk to your staff. It’s hard, but it’s easier than going to court every five seconds. You have to dissolve people’s hatred with meaningful human contact...”.

It is not as though there are any barriers created by the current legislative regime in the FW Act which prevent direct discussions and employee engagement.

If employers have a track record of regular, meaningful communication with their staff established before a dispute arises, they will be much better placed to have the hard conversations required in situations of workplace conflict which, by their very nature, are unproductive. This is the nub of dispute prevention. This is where the regulator must carve out a role if it is to advance harmonious, productive and cooperative workplace relations in the building industry

Going forward, I see an increasing role for Government to actively work with companies and their employees and disseminate best practice. Capabilities that may once have been dismissed as ‘soft skills’, and cordoned with the Human Resources Department, will become new management disciplines for the best and brightest in our workplaces of the future.

This does not necessarily mean advocating for European style Works Councils (which as Associate Professor Anthony Forsyth of RMIT has observed ‘have not enjoyed the support of Australian unions, employers or industrial tribunals’ and, I might posit, are probably a step too far having regard to the barriers born out of our traditionally adversarial system),

However, it does mean looking for examples of good practice in meaningful consultation, participation or partnerships that fit within our cultural norms, whether they be joint consultation committees, models based on accepted and successful workplace health and safety committees or ‘other workplace-based forms of employee voice’.

In this regard I have been very interested to read about the case study of Leighton Contractors NSW/ACT & NZ on their Kempsey Bypass Alliance project reported in the Skills Australia report. According to the report:

  • On the KBA worksite, participating in decisions about how work is done is encouraged and Leighton Contractors has several mechanisms that enable employees to contribute to improving ... processes;
  • Innovation is encouraged;
  • Employees feel they have ample opportunity to have a voice at the Pre-starts and Toolbox meetings;
  • They have established a culture of open communication and acceptable work behaviours for everyone working on the project;
  • These company-wide policies have led to a drop in safety incidents, more reporting of hazards, innovative practices and high levels of job satisfaction.
  • The new measures have also reduced salaried staff turnover on the KBA project to 17% and the goal is 10%. The national average for the construction sector is 25%.

Conclusion

While the slanging match over who controls our national productivity levers may sell newspapers, it does not help employers in the construction industry lift productivity of their own operations.

Workplace Relations Minister Bill Shorten recently told the CEDA State of the Nation conference that the IR debate needs to move on between employer groups and unions “arguing about where you put the pendulum”.

With this call to arms we ought to be working together to elevate the productivity discussion toward a focus on mutual-benefit.

It will be necessary to examine the social, economic and technological relationships that underpin the way productivity is created.

At FWBC we recognise that generating shared value with people in the industry we are charged with regulating helps us leverage resources and knowledge from the industry to deliver better services at lower cost, improves our compliance outcomes and means we provide more meaningful, relevant services.

To adequately fulfil the functions of the FWBI Act, we are gearing ourselves not only toward encouraging lawfulness and compliance; we are focussed on providing the resources our industry needs to overcome their problems and create higher functioning workplaces.

Our national building and construction industry is overwhelmingly a highly skilled industry, contingent on cooperative interlinked operating processes and very measureable, tangible production. Our industry can be a leader for the new productivity frontier. I consider it FWBC’s priority to both address the productivity challenge in construction, and by doing so, create markers for other industries about how they can best bring the pieces of the puzzle together. The construction industry can provide positive examples, and positive direction.

Translating ‘cooperative, harmonious and productive’ workplaces, from paper to practice, will require contributions from us all. FWBC’s contribution will be the support of an innovative regulator for Australia’s building and construction industry.

**Note: See the print friendly version for a list of references**