With the passing of legislation that will abolish the Australian Building and Construction Commission, Paul Skelton looks at what’s next for the
electrical industry.

While introducing the Building and Construction Industry (Transition to Fair Work) Bill, which would see the abolishment of the Australian Building and Construction Commission (ABCC), Greens Senator Rachel Siewert said: “The ABCC represents the Howard Government’s Work Choices agenda at its most extreme… the Greens are not prepared to sit back while this travesty of justice continues.

“It’s time to act to restore workers’ rights in the workplace.”

In March 2012, the Senate passed this Bill, which means the ABCC will now be replaced by a new body – the Office of the Fair Work Building Industry Inspectorate.

But is this a good thing for the Australian electrical industry?

To answer this question, it is important to understand exactly what the changeover from the ABCC to the Inspectorate means.

The Department of Employment and Workplace Relations says under the new system, penalties for breaches of industrial law will be brought in line with those in the Fair Work Act 2009.

Further, compulsory examination notices will be retained, however they will now be subject to a number of significant safeguards.

The Federal Government believes this legislation balances the requirements to ensure compliance with the law and the fair treatment of individuals in the building and construction industry.

The Government has stated that “anyone who breaks a law should feel the full force of the law.” And that the “Government will not tolerate an environment in which people choose which laws to obey and which ones to ignore.”

The Construction, Forestry, Mining and Energy Union (CFMEU), like many other unions, believes that closure of the ABCC is a positive step forward for the industry.

But Government “must ensure the new Inspectorate respects workers’ rights.”

CFMEU national secretary Michael O’Connor says the abolition was long overdue.

“This is a great step forward for construction workers, and for any Australian who cares about workers’ rights,” he says.

Although supporting the abolition of the ABCC, the CFMEU remains concerned that the new investigative body retains the “coercive powers” that allow construction industry workers to be subject to secret interrogations.

“The new Inspectorate must avoid the ideological anti-union bias of the ABCC and be an even-handed regulator which does not abuse its powers.

“The ABCC … has been a waste of money, serving only to try and intimidate union members who stand up for decent wages and safety in construction.

“It has failed to tackle safety issues or illegal conduct by employers, including the widespread use of sham contracting, which costs taxpayers billions each year.”

The Shadow Minister for Employment and Workplace Relations, Senator Eric Abetz, however, says the closure of the ABCC is a “dark day” for the Australian construction industry.

“The red carpet has now been rolled out to the kinds of thuggery and illegality that was being stamped out following the Cole Royal Commission of 2003,” he says.

“While the ABCC has had a very positive impact on transforming the culture of the construction industry, it has not fully transformed it as yet. He says that, should the Coalition win the next election, they will restore the ABCC with all its powers.

“The ABCC has delivered an annual $6 billion economic welfare gain to the Australian economy as well as fewer working days lost, higher productivity and assisted in delivering a stronger economy.

“Every Australian has the right to go to work free of thuggery and illegality. This bill will not just unroll illegality and thuggery but will also essentially legalise bribery in the industry.”

The biggest issue, according to Senator Abetz, appears to be a last minute amendment to the Bill that allows parties to “pervert the course of justice”.

“If a builder or contractor, or union, is in breach of the law but comes to a private settlement, any proceedings by the Inspectorate have to be dropped. This is the first time in Australian legislation, as I understand it, where the private interest can override the national interest.

“The example I use is if I drive through a red light and crash in to your car, you can sue me for the damage to your car and I have to pay. But the police can also charge me for having driven through that red light. What this new legislation says is if I pay you off and you say the proceedings between us are settled, the police can no longer charge me for going through the red light.

“This of course will only benefit big businesses and big unions who can afford to pay people off. The individual contractor won’t be able to because they simply won’t have the financial wherewithal to pay off anybody they may have offended.”

National Electrical and Communications Association (NECA) chief executive James Tinslay shares concerns over this new ‘pay-off’ approach. He says he is mystified as to why eleventh hour amendments were made to the Bill that would encourage illegal activity to go unpunished by the new Inspectorate. These amendments mean illegal activity may not be pursued by the new regulator if a deal was brokered between two parties because they could now become immune from prosecution.

“The move by the Government to weaken powers and transfer the regulator to Fair Work Australia is a step in the wrong direction. Many in the industry will see this new body as a toothless tiger and now push the boundaries even further to see what they can now get away with.

“The whole idea of the building industry regulator is to stamp out illegal activity and not encourage more of it by turning a blind eye.

“NECA is concerned that the proposed new regulator will now simply have no choice but to bury its head in the sand and allow illegal practices to continue simply because the guilty parties have made a deal that renders them immune from prosecution. How could this possibly help stamp out illegal activity in the industry?”

James believes the ABCC has been effective in making the building industry more accountable and compliant. Its removal is a worrying sign for electrical contractors and all businesses involved in the building and construction industry.

“Many of the recommendations from the 2003 Cole Royal Commission into the building and construction industry remain relevant today. There were plenty of fines handed out last year which indicates illegal activity is still occurring.

“The law is the law and any new independent regulator must be able to assess each case on its merits and not have its hands tied behind its back because two parties have made a deal that makes them immune from prosecution.”

He says that under the ABCC the building industry was much more accountable.

“The ABCC enabled the electrical and communications industry to work alongside other industries on a level playing field when working on construction or building projects. The building and construction industry has at its heart the specialist subcontractor model. The push by the union movement to restrict specialist subcontractors supplying goods and services to the industry will result in a significant increase in building costs for business and residential customers.

“The Fair Work Act has seen unions gain greater powers to restrict employer flexibility on employment issues. This in turn can stall potential productivity growth. Removing the building industry regulator or its core responsibilities will contribute to the stalls in productivity which in the long term will cost businesses and their customers.”

Wilhelm Harnisch is the chief executive officer of Master Builders Australia – a major building and construction industry association. He says the passage of the Bill “defies common sense and will seriously risk damaging the industry’s productivity and at the same time lessen the community’s welfare.”

He says the move is incredibly premature, especially considering “there remains serious, systemic, unlawful industrial behaviour in the building sector that can only be properly dealt with using the current laws administered by the ABCC.

“The Bill should not have been passed. It is regrettable that Parliament has introduced a change for the worst. History will show that the Bill should not have passed the Parliament,” he says.

“As sure as night follows day, unless the unions change their entrenched practices there will be the need for another major inquiry into the industry’s unlawful industrial conduct because the practices that are only just being quelled now will return and once again become commonplace.

“The old practices of stopping concrete pours, overtly coercing and bullying subcontractors and creating an environment of fear are just around the corner.

“According to the ABCC’s latest Annual Report coercive practices remain an endemic issue. The new regulator will have fewer powers and lower sanctions to apply to this unacceptable practice. In 2010 to 2011, the Courts imposed a total of $2.57 million in penalties across a range of unlawful behaviour, including unlawful industrial action, right of entry, sham contracting and coercion. The latest amendment which will prohibit the new Inspectorate from pursuing potential breaches of the law where an agreement between the contractor and the unions is reached further adds to the lack of power for dealing with unlawful industrial behaviour in the industry.

“The new arrangements will adversely affect productivity. Master Builders independently commissioned research shows that all Australians are better off by $6 billion each year because of the industrial relations reforms that have been in place since October 2005, notably the ABCC. With the passing of the Bill this productivity affect will be lost and the community will be worse off.

“Master Builders will now work cooperatively with Government to assist with the transition to a new regulator, but at every step of the way we will be reinforcing the message that this unnecessary change is a huge and damaging mistake.”

With such a heated debate surrounding the abolishment of the ABCC, it’s quite simple for people to simply blame the unions. While it is easy to fi nd examples of over-zealous union bosses using bullying tactics on jobsites, it is also important to remember that these groups have played an important role in the development of worker’s rights and industrial relations. But the role of unions in this Bill isn’t necessarily the key issue facing the construction industry now that there is no more ABCC. Rather, it’s about ensuring that the new Inspectorate isn’t a powerless fi gurehead.

As the Housing Industry Association’s industrial relations spokesman David Humphrey says: “The new Fair Work Inspectorate must be appropriately funded and resourced to ensure that (illegal activity) does not once again become stock standard in the industry.”