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E L E CT R I C AL CONNE CT I ON
W I NT E R 2 01 5
By Kevin McCosh - Executive Director & IR
specialist, Victoria.
Conducting business in the electrical
contracting industry is tough. Today’s
economic environment has resulted in massive
numbers of electrical worker redundancies and
businesses going to the wall, and there are no
indicators pointing to a change anytime soon.
In Victoria, electrical contracting businesses
who have union enterprise agreements
are finding it particularly hard to win work.
The high cost of labour associated with
these companies is fast making them
uncompetitive. A worker who is employed by
such companies is paid $45.66 per hour for
a 36 hour week, receives double time for any
overtime and shift work, receives 26 rostered
days off a year, and on top of that also has
over $120 per week paid on their behalf into
a redundancy and income protection fund.
These conditions are great for workers but are
costing jobs on a daily basis.
There has been three other significant
developments in the Victorian electrical
contracting industry over the past two years.
The first is the growing influx of interstate
contractors competing directly with Victorian
contractors for the little work that is available.
These interstate contractors operate from a
far lower cost base as they are not weighed
down by the high costs associated with union
enterprise agreements. More and more we
are seeing interstate contractors winning work
from Victorian contractors as they are cheaper
by far. Builders these days are displaying a
preference for contractors tendering on a lower
price, rather than by the type of enterprise
agreement they have.
The second major development in
the industry has been the growing trend
for contractors to deal directly with
their employees to negotiate enterprise
agreements. These companies tend to
position themselves on a more competitive
footing in the part of the industry in which
they operate in. They manage to do this while
at the same time maintaining wages and
conditions that keep their employees happy.
Due to their competiveness, these companies
are also winning a sizable slice of available
work in the Victorian market. They tend not
to have redundancies, in fact in many cases
they are growing in their size and capability.
A further trend which is enormously
concerning is the drop off in employing
apprentices. The main reason again for this
dilemma is again due to cost! While a junior
apprentice in a union enterprise agreement
starts their career at $14.55 an hour for a
36 hour week in their first year, they quickly rise
to $33.02 an hour in their final year.
The repercussions of apprentice redundancies
and lower employment levels will be realised in
a few years’ time when the industry will face a
massive shortage in qualified electricians.
In the face of these concerning
trends, the Electrical Trades Union
has launched its
Follow the Leaders
Contracting EBA Campaign 2014
.
What the union believe is reasonable
in these hard economic times is a 20%
increase to wages and allowances over a
three year period, an immediate increase in
superannuation guarantee contributions to
12%, and an additional 18% increase to the
employer contributions into the severance
and income protection fund in addition to the
establishment of portable annual leave and
sick leave schemes. These unreasonable
demands will result in the devastation of the
electrical contracting industry. The result will
be more massive job cuts, Victorian electrical
companies closing their doors and greater
opportunity for interstate contractors to move in
and capture Victorian electrical work.
Further to these problems is the pending
introduction of a new federal
Building and
Construction Code
. When passed into law,
all building and construction companies,
including electrical contractors will have to
be fully compliant with the Code in order to
be allowed to tender for government funded
work. Government funded work currently
constitutes 42% of all work performed in the
industry. Companies who have enterprise
agreements certified by the Fair Work
Commission on or after 24 April 2014 will be
required to have content of such EBA’s fully
compliant with the code otherwise they risk
not being allowed to tender for government
funded work. If the current union enterprise
agreement was recertified in its current form
it would not be code compliant. Should new
claims made by the union in the ‘Follow the
Leaders Contracting EBA Campaign 2014’
be agreed to for a new enterprise agreement,
then that EBA would also not be compliant
with the new code.
For all of the above reasons, the
IR Committee of NECA recently unanimously
formed a view to recommend to the entire
electrical contracting industry that employers
should pursue enterprise agreements directly
with their employees. This is the only viable
option that can provide Victorian electrical
contracting businesses with the ability to
compete in today’s market and to offer
some degree of job security for Victorian
electrical workers.
How to keep an electrician employed