DAVID PEETZ. The battle over the Building and Construction Commission isn’t finished yet

Dec 8, 2016

Now that the ABCC will mostly be a mere shadow of its former self, the Building Code becomes an even more important point of distinction. … It is the identity and ideology of the Director of the ABCC that matters a lot more than the underpinning legislation. 

The passage of the legislation enabling the re-establishment of the Australian Building and Construction Commission (ABCC) last week was presented by most journalists as a victory for Malcolm Turnbull, by some unions as a great defeat for workers, and by many on the right as a total failure of government nerve.

It’s probably none of those things. One of the main reasons is that, despite the headlines, the battling is far from over.

Indeed, the compromises made to get the ABCC legislation passed make what is yet to come all the more important.

The hours leading to the passage of the Bill were something of a carambolage for the government. The powers available to the re-established ABCC ended up looking a lot more like those available to the current Fair Work Building Industry Inspectorate (FWBC, for some reason), created by Julia Gillard, than like those available to the first incarnation of the ABCC, created by John Howard.

The amendments meant that, amongst other things, there were more constraints on the exercise of coercive powers by the ABCC than originally envisaged by the current government.

That said, it is not the same as the legislation establishing the FWBC. Fines for unions, engaging in what some see as legitimate industrial action, in or affecting the construction industry will be a lot higher than those in other industries.

And the legislation carries a new offence of ‘unlawful picketing’ that even the old ABCC could not enforce. You don’t have to prove that a picket ‘intimidated’ someone, only that it ‘would reasonably be expected to intimidate’ someone.   The ABCC is already paying ‘close attention’ to pickets on a Melbourne construction site.  

In addition, though, and somewhat remarkably, the ABCC legislation carries with it the burden of enforcing a local content and local worker regime with wording that is (perhaps unintentionally) extreme, especially in terms of the requirements for the use of foreign workers.   That will increase, not reduce the cost of construction. That, plus the many concessions that put constraints on the power of the ABCC, is no doubt why many on the right felt betrayed by the outcome of the law’s passage.

Some might believe their own rhetoric about the ABCC leading to a huge boost in aggregate productivity in the industry and a multi-billion dollar improvement in national income. Even the Productivity Commission know, however, that the statistical data do not support such claims. And those advocating the legislation would know that, despite claims to the contrary, the ABCC bill would do nothing about union corruption—because the ABCC simply has no jurisdiction in that area.

Those who don’t believe the rhetoric will know that the price for a piece of legislation aimed at transferring power from labour to capital in the construction industry is going to be a net increase in construction costs.

Another feature that means the ABCC is ‘more of the same’ is that all the FWBC staff, including at the top, have already transferred to the ABCC.

And, as an earlier analysis on these pages revealed, it is the identity and ideology of the director that matters a lot more to how the ABCC / FWBC functions than does the underpinning legislation.

One of the many amendments to the bill, made in the Senate, required that the ABCC be even handed in its hounding of unions and employers—it ‘must ensure that…policies and procedures [are] applied in a reasonable and proportionate manner to each of the categories of building industry participants’. Presumably the ABCC will respond by intensifying its persecution of employers who cooperate with unions, which would not really be in the spirit of the amendment even if perhaps within the letter of it.

The spirit of that amendment would be difficult for the head of the new ABCC to follow. So it should provide opportunity for some lively Senate Estimates hearings. It may also open the door for a new Labor government to replace the head of the ABCC before their time expires, if they don’t resign first. (Labor’s appointee did that on the change of government, but his Liberal predecessor did not, so the precedents are ambiguous.)

That is not, however, what I mean when I say that the battle is not yet over. I am referring instead to the fact that the Building Code, to which the ABCC legislation gives the power of law, has not yet passed the gauntlet.

Unlike the ABCC Bill, the Building Code does not have to be passed by the Senate. The Senate could just ignore it for 15 sitting days, in which case it would stay in effect. But the Senate also has the capacity (until late March 2017) to disallow it.

It needs a majority to vote in favour of a disallowance motion in order for that to happen. A majority voted for the Bill to pass the Senate, so that would require at least two Senators to change their vote. But Nick Xenophon alone accounts for three votes in the Senate.

Even before the concessions were made to the ABCC bill, the Building Code, rather than the legislative framework itself, was going to be the main difference between what the ABCC could do and what the FWBC could do.

Now that the ABCC will mostly be a mere shadow of its former self, the Building Code becomes an even more important point of distinction.

Disallowance could happen because there are some contentious aspects to the Building Code. One of the most controversial aspects of the Building Code, its retrospectivity, was traded away in order to get the ABCC bill passed.

But other features of the Building Code remain.

For example, all ‘threatened’ industrial action must be reported to the ABCC. Unregistered agreements are prohibited. ‘Undue pressure’, however defined, cannot be put on anyone to make over-award payments or have any other form of workplace arrangement­—and if it is, the ABCC must be told. Employees must be ‘free’ to decide whether they become, or do not become, union members.

The ABCC’s earlier incarnation interpreted this as meaning no Eureka flags or stickers associated with a union may be displayed on a construction site. While the Building Code is written to appear impartial, the way it is administered may be anything but that.

The ABCC, using a power delegated from the Minister, can exclude firms that don’t comply with the Building Code from tendering opportunities with any Commonwealth body for a fixed period of time up to 1 year.

This is probably one reason why Nick Xenophon expressed concern that:

It’s a bit unorthodox, is it not, for one person, one body to be both investigator and assessor of compliance and also be responsible for imposing sanctions? There’s no separation of those functions…That, to me, smacks of causing real difficulties in the way this would operate.

Xenophon thereby likened the Building Code to The Creature from the Black Lagoon, a reference he did not intend to be complimentary.

Not everything is strictly enforced. Firms will not be barred from Commonwealth projects if they repeatedly breach health and safety regulations. The government’s occupational health and safety Accreditation Scheme is not administered under, or a requirement of, the Building Code.

Days before two workers were killed at an Eagle Farm construction site in Brisbane, two men had separately walked off the job over safety concerns. Had a collective walkout occurred, the FWBC or ABCC could well have prosecuted them. Earlier, the CFMEU claimed that, while construction firm Grocon had been fined $250,000 for the deaths of three passers-by in a wall collapse, the union had been fined $1,250,000 for protesting against Grocon’s safety performance.

The construction industry is very dangerous, with numerous workers killed each year, which is one reason why it is more unionised than many safer industries. So it is not surprising that many observers, even some declaring support for ‘neoliberal’ policies, conclude that restoring the ABCC would lead to more deaths in the industry—‘if construction sector deaths return to the average level of the ABCC years, it will mean an extra 10 deaths a year’.

Whether problems with the Building Code, and the contrasting treatments of flags and deaths in the industry, are enough for the Code to be rescinded by the Senate is hard to say at the moment. But it is fair to say that the fight over regulation of the construction industry is not yet over.

David Peetz is Professor of Employment Relations, Centre for Work, Organisation and Wellbeing, Griffith Business School, Griffith University.

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