13 July 2012FWBC Chief Executive's speech to the Master Builders Association NSW Top 50 Builders Luncheon

I acknowledge the traditional owners of the land upon which this function takes place; the Gadigal band of the Eora Nation, their elders past and present.

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

Introduction

Brian, thank you for the introduction and thank you Gordon for inviting me to speak at this function today which is so generously being sponsored by CSR Building Materials.

This is not the first time that I have addressed the MBA Top 50 Builders Luncheon, but it is the first time as the Chief Executive of the new agency charged with promoting fair and productive workplaces in Australia’s building and construction industry.

That agency is Fair Work Building and Construction or, as it will likely become known, “FWBC”. This is not to be confused, however, with the other “FWBC” you’ll come across if you google that acronym, the Friendship West Baptist Church in Dallas Texas. The only remote similarity is that I am evangelical about workplace relations compliance in the building and construction industry.

There are three take home messages from my address today.

First, (if I might steal a commonly used phrase in the IR world) the ABCC is “dead, buried, cremated”.

Second, FWBC is more than just a name change.

And third, FWBC will match or better the regulatory service offering of its predecessor agencies.

FWBC commenced operation on 1 June 2012 and I can report, in this Olympic year, that we have been out of the blocks early, out and about visiting building sites all around the country from day one. In fact, in the first six weeks of operation Fair Work Building Industry Inspectors have conducted an impressive 361 site visits.

And so we have started our operations, as we intend to continue them; as a visible and accessible regulator.

It is important to be clear from the outset that FWBC is an independent agency. It is not a part of the Fair Work Ombudsman or Fair Work Australia. It is an entirely separate, stand alone agency with its own agency head, staff and considerable budget of about $32 million.

The context for FWBC’s work

It is also important to understand that, in regulating workplace laws in the building and construction industry we do not undertake that important work, just for the sake of workplace relations compliance.

What we do, and the public value we deliver, needs to be understood in a broader context, namely the national importance of the building and construction industry.

Two weeks ago 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 project is connected to the resources sector that is the powerhouse of our nation’s economy. 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 in this country free from unprotected industrial action, breaches of right of entry or breaches of freedom of association.

Even here, in my home State of NSW, 4,990 kms away from where our country his being rebuilt, the importance of the building and construction industry places the work that we do at FWBC into its important context.

  • ABS ‘Value of Building Work Done’ statistics show NSW accounts for 22 percent of building activity nationally ($4,396,953,000).
  • In 2009–10 the NSW construction sector was estimated to represent $24.5 billion, or 7.5 per cent of the state’s total industry value.
  • NSW’s construction industry employs almost 300,000 of our fellow New South Welshmen, accounting for 8.5 per cent of the State’s total employment.

NSW, Australia’s largest economy, also has the highest concentration of Australia’s construction and infrastructure companies headquartered here.

Of course it is appropriate to acknowledge that in the past six months there has been slow industry activity in NSW and that this has been occasioned with several high profile corporate construction failures.

Notwithstanding, there is good news as we have seen the number of new projects and projects in construction increase marginally month-on-month. NSW maintains a decent slice of the pie when it comes to the number and value of projects entering the construction phase – with 26.9 percent of projects entering construction nationally located in NSW, and 24.5 percent of the national dollar value when we look at project starts.

The work that FWBC does, therefore, must be understood in this broader industry context.

At FWBC we see our work as a part of something much bigger, as part of an industry that is creating prosperity for this nation. In this context we want to see building and construction undertaken in a way that is both fair and productive.

Fair, in the sense that worker’s aren’t being ripped off. Where they are receiving the wages and working conditions they are entitled to and not being required to enter into sham contracting arrangements.

Productive, in the sense that we want to make sure that there isn’t unprotected industrial action going on, and people aren’t being prevented from participating in the building and construction industry either because they are, or they are not members of a representative organisation. Freedom of association is something I am particularly passionate about.

Fair Work Building & Construction – the new regulator

The Fair Work (Building Industry) Act 2012 (FW Building Act) passed both houses of Parliament on 30 March 2012. The FW Building Act established FWBC as the specialist industry regulator.

As the specialist regulator of workplace laws in the building and construction industry FWBC is the next iteration in the inevitable evolution of regulation in this sector. Specialist regulation of workplace relations in Australia’s building and construction industry has been through a number of changes since the first national specialist regulator; the Interim Building Industry Taskforce, was created nearly ten years ago or, before that, the Taskforce in NSW set up more than 20 years ago.

However, the commencement of FWBC must be seen as more than just a name change.

We have a broader legislative remit to promote harmonious, productive and cooperative workplace relations in the building industry including by providing education, assistance and advice to building industry participants.

I see our role, not just as occupying the regulatory space, but as an agency responsible for building the capacity of the industry to better comply with workplace laws.

However, from your perspective; from the perspective of employer organisations and their members; in relation to those regulatory issues dear to your hearts, I promise you there will be no diminution in the service offering, service delivery or experience that you have with FWBC.

Building and construction employers have unique experiences and concerns when it comes to issues like coercion related to bargaining, lawful union right of entry and unprotected industrial action. These issues will continue to be a focus of FWBC. We will investigate them, we will make determinations and (where it is appropriate), we will litigate.

We will enforce the law.

You will continue to be able to call FWBC for advice. You can continue to expect that Fair Work Building Industry Inspectors will be available to deliver presentations at your sites.

You can continue to expect that we will:

  • attend work sites for compliance purposes;
  • respond to 100% of calls within 24 hours;
  • tell you whether your matter will proceed to investigation within 3 days;
  • complete 80% of all of our investigations within 90 days; and
  • get matters into court as quickly as possible so that any resulting penalty is proximate in time to the breach.

We continue to be an impartial government regulator, accessible to all in the industry. Just as we will help employees recover their wages and entitlements, we will help employers get their books up to scratch.

We are a full service regulator and as such FWBC will continue a multi-faceted approach to delivering comprehensive regulation.

We will be a best practice regulator and I have every expectation that our services will continue to improve and be delivered with increased efficiency.

The power to enforce the law

In terms of FWBC’s powers, Fair Work Building Industry Inspectors have all the powers necessary for them to undertake their work. They have exactly the same powers as the inspectors of the Fair Work Ombudsman in addition to the continuing power concerning compulsory examinations (something I will say a little more about later).

Fair Work Building Industry Inspectors have responsibility for investigating breaches of workplace laws that relate to “building matters” across the full range of civil penalty matters contained in the Fair Work Act 2009.

However, from a regulatory perspective you can expect that we will be focussed on six in particular:

  • unprotected industrial action;
  • freedom of association;
  • coercion;
  • right of entry;
  • wages and entitlements; and
  • sham contracting.

We are a new agency but there remains considerable continuity.

Our senior executive team remains the same; me as the Acting Director, Deputy ABC Commissioner (Legal), Brian Corney, came across as FWBC’s Chief Counsel, the Deputy ABC Commissioner (Field Operations), Michael Campbell, came across as FWBC’s Chief of Field Operations.

At FWBC we already have a wealth of expertise and knowledge internally about the distinctive characteristics of the building and construction industry - the way it operates and the needs of industry participants. We have a skilled inspectorate who know this work and will continue to undertake it.

Therefore, I can be very confident in predicting that the service offering to head contactors, subbies, and project managers out on building and construction sites will be the same, if not better.

Our commitment to high standards of operation has been codified into the FWBC’s Statement of Professional and Ethical Standards. The statement makes clear what industry participants can expect from us, and how FWBC advisers, inspectors and lawyers must carry out their functions. Released in the first week of our operations it can be obtained from our website fwbc.gov.au.

Of course, there have been changes too.

First, there will be an Advisory Board appointed by the Minister.

The Advisory Board will have an important role in making recommendations about:

  • policies to guide the performance of functions and the exercise of powers; and
  • the priorities of, and the programs to be implemented by, FWBC.

It will be comprised of an independent chair, an employer representative, an employee representative, three other appointees, me as the acting director and Nicholas Wilson, the Fair Work Ombudsman.

I am very much looking forward to working with, what will no doubt be, a high calibre group of skilled advisors with specialist knowledge of our industry.

Importantly, though, the Advisory Board cannot direct me when it comes to action concerning investigations and litigation. Information about investigations and litigation remains protected and will not be disclosed to the Advisory Board.

A further change is that the FW Building Act does not contain building-specific civil penalty provisions or penalties. The higher penalty regime specific to people engaged in the building and construction industry, provided for by the former Building and Construction Industry Improvement Act 2005, has been removed and we now enforce the Fair Work Act 2009 penalty regime through our court actions.

In terms of what impact it will have on us as a regulator – for the vast majority of our matters, in fact in 80 percent of our matters, it will have no impact whatsoever. This is because, in 80 percent of matters prosecuted the courts have not been imposing penalties in excess of the maximum already provided for in the Fair Work Act 2009.

In any case effective compliance is not just about civil penalties flowing back to the Commonwealth.

For this reason, FWBC will continue to be concerned to better understand “What has been the economic loss, of people impacted by unlawful conduct.” That is to say, will continue to pursue compensation for the victims of unlawful conduct.

Where there are demonstrable losses as a result of unlawful conduct – (be it unprotected industrial action or sham contracting), there is a role for the regulator in seeking to exercise the full range of remedies available under the legislation, including recouping losses for affected parties.

There and also new legislated provisions which remove the Director’s capacity to take or continue civil proceedings, if a matter has already been settled in court by the parties. The intent of those provisions is to ensure building industry participants are not subject to multiple proceedings in relation to matters that may have already been discontinued. Our regulatory response will be an increased effort to get our matters into court first.

The FW Building Act also brings with it some new requirements about the use of the compulsory examination powers. I want to touch on those briefly.

Use of the power to compel someone to attend an examination and answer questions now needs to be approved by the Administrative Appeals Tribunal. My office has already had extensive consultation with the AAT and we have an agreement in place to ensure that such applications are dealt with swiftly. The Commonwealth Ombudsman will also monitor and review use of the compulsory powers and provide reports to the parliament. The Act also stipulates that an attendee at an interview will be reimbursed reasonable expenses.

As I have said many times, I am confident that I will be able to affectively exercise the powers in the FW Building Act to obtain information where an investigation would otherwise stall due to unavailability of evidence from voluntary means.

National Code and FW Building Act

Fair Work Building Industry Inspectors continue to have responsibility for promoting and monitoring compliance with the National Code.

As those of you that are Code compliant will know, the Government issued new Implementation Guidelines for the National Code earlier this year.

It is my intention to work with industry stakeholders and give consideration to how we can improve the assistance we provide to industry in respect of the National Code. If you are not Code compliant, FWBC can help you become Code compliant and thus place you in a position to win government work. Just give us a call.

FWBC regulatory program next 12 months – Compliance, education, partnerships

As well continuing our compliance function, at FWBC we will work to make sure everyone in the industry has access to the information they need to comply with workplace laws.

Over the next twelve months we 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.

This work will see us:

  • improve the quality of our online information and resources.
  • build the capacity of our inspectorate to act as brokers and facilitators, as well as investigators.
  • provide targeted information and advice to specific segments of the industry like apprentices, small-businesses and independent contractors; and
  • work with industry participants to devise new educational resources and service offerings.

Our purpose in doing this is to make your lives easier from a workplace relations compliance perspective. It will free you up to get on with doing what you do best – building and constructing. Our workplace inspectors spend a good deal of time speaking with people in the industry and they listen to the experiences of project managers and site managers and small operators.

What they report back is that people in the industry want tools that make compliance easier. Tools that encourage fairness and productivity. Tools that support best practice. Tools that give you insights into business decision-making, backed-up by advice that is tailored to your specific circumstances.

By increasing the resources and prioritising our education function we can help you create an industry that is equipped to move beyond simply fostering compliance, and create a stable business environment where innovative, dynamic workplace practices are possible.

We will also be focussed on improving our understanding of the industry we operate in, by developing and strengthening relationships with people in the building industry at all levels.

This is so we can get early notice of emerging issues and be best placed to deal with them proactively.

Everyone in this room is to be congratulated for being members of an organisation like the Master Builders Association because you already receive high quality advice about issues happening in your workplace. Over the coming year we will be considering new ways that we can collaborate with organisations like the MBA to make sure you have access to the resources you need. The MBA is an important co-producer of our public value.

Rest assured, FWBC will continue to take a hands-on approach to the way we regulate this industry.

Inspectors are our primary service channel. Our regulatory program for the next year includes a focus on site visits. You can expect to see Fair Work Building Inspectors on a site you are working on.

We will be undertaking a program of targeted audits this year, and will back these audits up by providing resources so that industry participants can voluntarily rectify any issues that are uncovered.

We have a great relationship with the major employer associations and the head contractors. Over the next year will be working to create opportunities to learn more, and have more conversations with subcontractors, smaller operators and employees in the industry.

Conclusion

Although it is a diverse sector, varying in terms of trades, skills, delivery and processes, building and construction sector participants are united by the desire to operate in a harmonious and prosperous industry.

FWBC shares common objectives with the MBA and its members. We all want to see good workplace relations practices in place that allow projects to be delivered on time, on budget, with no disruption. We all want to see confident investment and stable growth. We want fair and productive building and construction workplaces.

However, the culture change we still need to see in our industry will require partnerships between employees and subbies, head contractors and clients, unions and employer groups and with FWBC as the regulator.

In this endeavour we at FWBC stand ready and willing to stand with you shoulder to shoulder to build the capacity of the building and construction industry to be the best it can be, productive and fair, for the benefit of not only those in the industry, but all Australians.

Thank you.