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Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2] [and] Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 [No. 2]



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BILLS DIGEST NO. 100, 2015-16 16 MARCH 2016

Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2] [and] Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 [No. 2] Jaan Murphy Law and Bills Digest Section This Bills Digest revises an earlier version dated 23 January 2014, to update the background to the Bills to reflect developments since their previous introduction in 2013, including the conclusion of the Royal Commission into Trade Union Governance and Corruption.

Contents

Purpose of the Bill ............................................................... 4

Structure of the Bill ............................................................. 4

Background ......................................................................... 4

Productivity Commission workplace relations framework inquiry ...................................................................................... 5

Harper review of competition law ........................................... 5

Royal Commission into trade union governance and corruption ................................................................................ 6

Industrial relations ................................................................ 6

Workplace injuries and deaths .............................................. 7

Current committee consideration ........................................ 8

Senate Education and Employment Legislation Committee ............................................................................... 8

Senate Standing Committee for the Scrutiny of Bills .............. 8

Previous committee consideration ....................................... 8

Previous consideration by the Senate Education and Economics Legislation Committee........................................... 8

Previous consideration by the Senate Standing Committee for the Scrutiny of Bills ......................................... 9

Previous consideration by the Senate Education and Economics References Committee ........................................ 12

Date introduced: 2 February 2016

House: House of Representatives

Portfolio: Employment

Commencement: Sections 1 and 2 of the main Bill commence on Royal Assent; all other provisions commence on the day after Royal Assent. Sections 1 to 3 of the Transitional Bill commence on Royal Assent; all other provisions are tied to the commencement of the main Bill.

Links: The links to the Bills, their Explanatory Memoranda and second reading speeches can be found on the Bills’ home pages for the Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2] and the Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 [No. 2] or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at

March 2016.

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Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2] [and] Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 [No. 2] 2

Policy position of non-government parties/independents ... 12

The Opposition ...................................................................... 12

The Australian Greens ........................................................... 13

Other non-government parties and independents ............... 13

Senator Xenophon ............................................................... 13

Senators Lambie and Madigan ............................................ 14

Senators Day and Leyonhjelm ............................................. 14

Ms McGowan, Mr Katter and Senator Muir ........................ 15

Position of major interest groups ....................................... 15

Financial implications ........................................................ 16

Statement of Compatibility with Human Rights .................. 16

Key issues and provisions................................................... 17

Expanded coverage of the Bill ............................................... 17

Geographical jurisdiction .................................................... 17

Industry coverage ................................................................ 17

Ancillary sites ....................................................................... 18

Impact of expanded coverage ............................................. 18

Coercive powers .................................................................... 18

Current coercive powers ..................................................... 18

Proposed coercive powers .................................................. 18

Ombudsman oversight of use of coercive powers .............. 19

No privilege against self-incrimination ................................ 20

Additional protections ......................................................... 20

Retrospective operation of coercive investigatory powers ................................................................................. 20

Criminal Offences .................................................................. 21

Civil penalty provisions .......................................................... 21

Industrial action ..................................................................... 21

Protected industrial action .................................................... 22

Constitutionally covered entities........................................... 22

Unlawful industrial action ..................................................... 23

Effect of new definitions ..................................................... 23

Unlawful Picketing ................................................................. 23

New unlawful picketing offence .......................................... 23

First limb of unlawful picketing ......................................... 23

Second limb of unlawful picketing .................................... 24

Prosecution after settlement of civil disputes....................... 25

Reverse onus of proof ........................................................... 25

Project agreements ............................................................... 26

Chapter 3—The Building Code .............................................. 26

Chapter 4—The Federal Safety Commissioner ...................... 26

The Transitional Bill ............................................................... 27

Concluding comments ....................................................... 27

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Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2] [and] Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 [No. 2] 3

Appendix A ....................................................................... 28

Appendix B ........................................................................ 29

Appendix C ........................................................................ 33

Appendix D ....................................................................... 36

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Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2] [and] Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 [No. 2] 4

Purpose of the Bill The purpose of the Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2] (the Bill) is to re-institute a separate workplace relations framework for the building industry based largely on the Building and Construction Industry Improvement Act 2005 (the BCII Act). Among other things the Bill re-establishes the Australian Building and Construction Commission (ABCC), reintroduces provisions dealing with unlawful industrial action, coercion and the associated civil penalties specific to the building industry, and broadens the application of those provisions to include transporting and supplying of goods to be used in building work.

The purpose of the Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 [No. 2] (the Transitional Bill) is to wholly repeal the Fair Work (Building Industry) Act 2012 (FWBI Act),1 to make necessary amendments to other Acts and to provide for the transition to the new arrangements.

Identical versions of these Bills were introduced into the Parliament on 14 November 2013.2 As the Bills were negatived at the second reading stage by the Senate on 17 August 2015, they are a double dissolution trigger.3

Structure of the Bill The Bill contains nine chapters.

• Chapter 1 contains preliminary material, including definitions which extend the scope of building and construction regulation

• Chapter 2 establishes the ABCC and the position of the ABCC Commissioner (the Commissioner)4

• Chapter 3 provides the Minister with the power to issue a Building Code

• Chapter 4 establishes the Federal Safety Commissioner

• Chapter 5 deals with unlawful action, including a new offence of unlawful picketing

• Chapter 6 deals with coercion, discrimination and unenforceable agreements

• Chapter 7 deals with powers of the Commissioner and other authorised officers to obtain information

• Chapter 8 deals with enforcement and

• Chapter 9 contains miscellaneous provisions, including provisions to do with handling of information, powers of the Commissioner, and courts.

The Transitional Bill contains two Schedules. Schedule 1 contains consequential provisions and repeals the FWBI Act. Schedule 2 contains transitional provisions.

Background Readers are referred to pages 3 of 8 of Bills Digest No. 34, 2013-14, which provides background to the Cole Royal Commission, BCII Act, Wilcox Report, FWBI Act and Building Code.5 As this is a revised version of that Digest, it only examines the recommendations made by the Royal Commission into Trade Union Governance and

1. Fair Work (Building Industry) Act 2012. 2. Parliament of Australia, ‘Building and Construction Industry (Improving Productivity) Bill 2013 homepage’ and ‘Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 homepage’, Australian Parliament website. 3. Constitution, section 57; S Sen, The double dissolution process: questions and references, Research note, 45, 2002-03, Department of the

Parliamentary Library, Canberra, June 2003, p. 1-2. 4. Clause 29 establishes the ABCC, whilst clause 15 establishes the Commissioner and Deputy Commissioner positions. 5. TRH Cole QC, Royal Commission into the Building and Construction Industry: first report, The Commission, Canberra, 5 August 2002;

TRH Cole QC, Final report of the Royal Commission into the Building and Construction Industry, The Commission, Canberra, February 2003, M Wilcox QC, Transition to Fair Work Australia for the building and construction industry: report, Workplace Authority, Canberra, March 2009, pp. 16 and 19. The role of the Wilcox report in shaping the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Act 2012 is examined in S O’Neill and MA Neilsen, Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2009, Bills digest, 16, 2009-10, Parliamentary Library, Canberra, 2009; S O’Neill and MA Neilsen, Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2011, Bills digest, 80, 2011-12, Parliamentary Library, Canberra, 2011. The Cole Royal Commission and the Government’s response to it are dealt with in more detail in S O’Neill, Building Industry Royal Commission: background, findings and recommendations, Current issues brief, 30, 2002-2003, Department of the Parliamentary Library, Canberra, 2003; P Prince and J Varghese, Building and Construction Industry Improvement Bill 2003, Bills digest, 129, 2003-04, Parliamentary Library, Canberra, 2004; P Prince and J Varghese, Building and Construction Industry Improvement (Consequential and Transitional) Bill 2003, Bills digest, 130, 2003- 04, Parliamentary Library, Canberra, 2004, and in P Prince, Building and Construction Industry Improvement Bill 2005 [and] Building and Construction Industry (Consequential and Transitional) Bill 2005, Bills digest, 139-140, 2004-05, Parliamentary Library, Canberra, 2005.

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Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2] [and] Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 [No. 2] 5

Corruption (the RCTUGC) and the Productivity Commission’s Report on Australia’s workplace relations framework (PC Report) that are relevant to the Bill, as well as providing updated statistics in relation to industrial disputation and workplace injuries and deaths.

Productivity Commission workplace relations framework inquiry The PC Report did not examine the need for a separate industry-specific regulator for the building and construction industry. However, the PC Report did note, in relation to secondary boycotts6:

… there are strong perceptions in sections of the business community, particularly in the construction sector, that there is inadequate enforcement of secondary boycott provisions. 7 (emphasis added)

The PC Report also noted that complaints received by the Australian Competition and Consumer Commission (ACCC) ‘about secondary boycotts appear to centre largely on the construction industry’, but noted that even if such complaints are ‘indicative of a localised (even if serious) problem, the solution may not lie in a change across the full gamut of [workplace relations] WR or competition law’. Instead the Productivity Commission suggested that the following was a possible solution to the frequency of secondary boycott complaints in the building and construction industry:

It is possible that the powers of Fair Work Building and Construction (FWBC) to compel witnesses to provide evidence could be applied, by giving FWBC shared jurisdiction with the ACCC to investigate secondary boycotts within the construction industry. Having obtained evidence, the ACCC would then be able to take action. A similar approach was also recommended in submissions to the Royal Commission into Trade Union Governance and Corruption, and was supported by several inquiry participants.

An advantage of this approach is that parties or activities that are potentially in breach of the secondary boycott prohibitions can also be the subject of other concurrent investigations by FWBC into potential breaches of WR laws. It would leave intact the general responsibility of dealing with secondary boycotts via the appropriate mechanism, but address the core issue — obtaining evidence — via another mechanism.

8 (emphasis added, footnotes omitted)

Ultimately the PC Report recommended:

The Australian Government should grant Fair Work Building and Construction shared jurisdiction with the Australian Competition and Consumer Commission to investigate and enforce the secondary boycott prohibitions of the Competition and Consumer Act 2010 (Cth) in the building and construction industry. 9

The Bill, as currently drafted, does not propose amendments reflecting the above recommendation. Whether the Government will seek to move amendments to give effect to the above recommendation during the passage of the Bill through the Parliament remains to be seen.

Harper review of competition law Whilst the Competition Policy Review Report (the Harper Review) did not examine the conduct of the building and construction industry in detail, it did note that:

Some industry organisations, especially in building, construction and mining, believe that public enforcement of the secondary boycott provisions is inadequate, a point emphasised in the Interim Report of the Royal Commission into Trade Union Governance and Corruption. Timely and effective public enforcement serves as a deterrent to boycott activity and needs to exist both in regulatory culture and capability. The Panel believes that the ACCC should pursue secondary boycott cases with increased vigour, comparable to that which it applies in pursuing other contraventions of the competition law.

10

6. Macquarie Dictionary website: ‘secondary boycott… a boycott placed by employees on dealings between their employer and another person or firm, usually because the employees of that person or firm are undertaking industrial action’. 7. Productivity Commission (PC), Review of Australia’s workplace relations framework, Inquiry report, vol. 2, 76, PC, Canberra, November 2015, p. 959. 8. Ibid., p. 960.

9. Ibid., p. 961, recommendation 31.1. 10. Prof I Harper, P Anderson, S McCluskey and M O’Bryan QC (Harper Panel), Competition policy review: final report, The Treasury, Canberra, March 2015, p. 68.

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The Harper Review noted that some submissions had argued that due to the degree of concerns in the construction industry, and the perceived complexity of the issues surrounding enforcing existing secondary boycott laws, a shared jurisdiction in relation to secondary boycotts between the ACCC and any Australian Building and Construction Commission-type body (should one be re-established) was warranted.11

The Harper Review recommended that the maximum penalty level for secondary boycotts should be increased from its current level of $750,000 to the same as that applying to other breaches of the competition law ($10 million) and that ‘the ACCC should pursue secondary boycott cases with increased vigour, comparable to that which it applies in pursuing other contraventions of the competition law’.12

Whilst the Bill does not directly deal with the issues of secondary boycotts, it does contain a provision that could arguably be used to combat some type of secondary boycotts. This issue is examined below under the heading ‘Expanded coverage of the Bill’.

Royal Commission into trade union governance and corruption In February 2014, the then Prime Minister, Tony Abbott, announced that he would be:

… recommending to the Governor-General, Her Excellency Ms Quentin Bryce AC CVO, the establishment of a Royal Commission to inquire into alleged financial irregularities associated with the affairs of trade unions. 13

In March 2014, the Governor-General issued Letters Patent to establish the RCTUGC with the terms of reference outlined by the then Prime Minister in February 2014, and appointed Dyson Heydon as Royal Commissioner.14 Relevantly to the Bill, the terms of reference included examining the:

… activities relating to the establishment and operation of… the Australian Workers Union… the Construction, Forestry Mining and Energy Union… the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia… 15

As a result of that (and other) aspects of the terms of reference, the RCTUGC was authorised to closely examine conduct of key building and construction industry participants. As a result of those inquiries, the RCTUGC made a number of recommendations in relation to the regulation of the building and construction industry.16 The table in Appendix C outlines the relevant recommendations made by the RCTUGC and whether the Bill, as drafted, would fulfil those recommendations. They are also examined below in the ‘Key issues and provisions’ section of this digest.

Industrial relations Days lost to industrial disputes per 1,000 workers in the construction industry are shown in Figure 1. Interpreting the picture is not simple.

First, there was no dramatic decline from the time when the Building Industry Task Force, which had many of the functions of the ABCC, began operations in 2002. Second, there have been many more days lost to industrial disputes in the last few years, since the former Labor Government began the changes to regulation. However, the peaks in the data appear to correspond to serious disputes in Victoria, which were a result of a tightening, not a loosening, of regulation. In addition, a significant reduction in days lost to industrial disputes per 1,000 workers in the construction industry is evident from late 2012 onwards. Indeed, the rate of disputation appears to now be approaching a similar rate to that recorded in 2006-2008 (broadly reflecting when the ABCC operated). Moreover, whilst higher overall, the overall trends in the figures for industrial disputes in the construction industry are nonetheless roughly similar to those for the economy as a whole.

11. Harper Panel, Competition policy review: final report, op. cit., p. 390. 12. Ibid., p. 391. 13. T Abbott (Prime Minister), E Abetz (Minister for Employment) and G Brandis (Attorney-General), Royal Commission into trade union governance and corruption [and] terms of reference, media release, 10 February 2014.

14. E Abetz (Minister for Employment) and G Brandis (Attorney-General), Royal Commission into Trade Union Governance and Corruption established, media release, 14 March 2014. 15. Royal Commission into Trade Union Governance and Corruption, Letters Patent, 13 March 2014, p. 2. 16. J Heydon AC QC, ‘Vol. 1, Appendix 1: law reform recommendations’, Final report of the Royal Commission into Trade Union Governance and

Corruption, The Commission, Canberra, 28 December 2015.

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Figure 1: Comparison of working days lost per 1,000 employees, construction and other industries

Source: Australian Bureau of Statistics (ABS), Industrial disputes, Australia, various issues, cat. no. 6321.0.55.001.

Workplace injuries and deaths It has been claimed that the ABCC resulted in an increase in the number of injuries and deaths in the construction industry. For example, David Noonan of the CFMEU said:

The biggest issue facing construction workers is poor workplace safety. The ABCC of course does not regulate safety, but those state and federal bodies that do are underresourced compared to the ABCC. The last time we saw the ABCC in place, safety suffered—it went downhill and fatalities increased in the construction industry. 17

Professor David Peetz wrote:

There were 36 fatalities in the construction industry in 2007-08, twice as many as in 2004-05, immediately before the ABCC commenced operations in late 2005. Under the ABCC, construction became the industry with the highest number of deaths. As observance with occupational safety tends to be lower where unions are weaker, this trend is not surprising.

18

There does seem to have been an increase in the rate of deaths in the years of the ABCC, and a reduction in recent years:

17. D Noonan, Evidence to Senate Education and Employment Legislation Committee, Inquiry into the Building and Construction Industry (Improving Productivity) Bill 2013 Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013, 26 November 2013, p. 3.

18. D Peetz, ‘Gillard’s other ABCC dilemma: making it work’, Crikey, 15 June 2009.

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Table 1: Fatality rate, construction and all industries, Australia

Fatality rate (deaths per 100,000 workers)

Industry of employer 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Construction 5.8 4.4 3.6 4.8 4.8 3.9 3.7 4.1 4.0 3.1 2.2 3.0

All industries 2.8 3.0 2.6 2.8 3.0 2.6 2.4 2.1 2.0 2.0 1.7 1.6

Source: Safe Work Australia, Work related traumatic injury fatalities, Australia, 2014, Figure 5.19

Current committee consideration Senate Education and Employment Legislation Committee The Bills have been referred to the Senate Education and Employment Legislation Committee for inquiry and report by 15 March 2016. Details of the inquiry are at the inquiry web page.20

Senate Standing Committee for the Scrutiny of Bills The Senate Standing Committee for the Scrutiny of Bills considered the Bills in Alert Digest No. 2 of 2016.21 The Committee restated its comments about the Bills made in 2013 (discussed below).

Previous committee consideration As identical versions of the Bills were introduced into the Parliament in 2013, previous consideration by various Committees is noted below.

Previous consideration by the Senate Education and Economics Legislation Committee The 2013 Bills were referred to the Senate Education and Economics Legislation Committee (Legislation Committee) for inquiry and report by 2 December 2013. Details of the inquiry are at the inquiry web page.22 The Legislation Committee’s report recommended that the Bills be passed.23 In its concluding remarks it stated:

The building and construction industry is an important sector of the Australian economy. Throughout this inquiry the committee has been presented with evidence of increased illegality and disregard for the rule of law in the building and construction industry. It is of the utmost importance that this sector is able to flourish and is not hampered by illegality and a culture of intimidation as evidenced in the inquiry. The committee is also persuaded by evidence that productivity in the sector has declined since the ABCC was abolished by the former government. An independent, empowered, and properly resourced regulator is necessary.

24

In a dissenting report, Labor Senators strongly recommended that the Bills not be passed:

The urgency to re-enact the Australian Building and Construction Committee [sic] is not based on genuine requirement for urgent workplace reform, but on political motivation following the change of government. Labor senators feel strongly that the Bills are being rushed unnecessarily through the Parliament. 25

In a further dissenting report, Australian Greens Senators also recommended that the Bills not be passed:

19. Safe Work Australia, Work related traumatic injury fatalities, Australia, 2014, Safe Work Australia, Canberra, October 2015, p. 19. 20. Senate Education and Employment Legislation Committee, ‘Building and Construction Industry (Improving Productivity) Bill 2013 [No.2] and the Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 [No.2]’, Parliament of Australia website. 21. Senate Standing Committee on the Scrutiny of Bills, Alert digest, 2, 2016, 24 February 2016, pp. 13-60. 22. Senate Education and Economics Legislation Committee, ‘Inquiry into the Building and Construction Industry (Improving Productivity) Bill

2013 [Provisions] and Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 [Provisions]’, Parliament of Australia website, November 2013. 23. Senate Education and Economics Legislation Committee, Building and Construction Industry (Improving Productivity) Bill 2013 [Provisions] and Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 [Provisions], report, The Senate, Canberra,

2 December 2013. 24. Ibid., p. 15. 25. Ibid., p. 17.

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The ABCC was biased in its work as it was driven by an ideological attack on construction workers and unions. Further, in recent years Australia’s construction industry laws have been condemned by the International Labour Organisation six times. For these reasons the Australian Greens reject the Bills in their entirety. 26

Previous consideration by the Senate Standing Committee for the Scrutiny of Bills The Senate Standing Committee for the Scrutiny of Bills (Scrutiny Committee) raised a large number of concerns about the 2013 Bills.27 The Minister responded to those concerns in January 2014.28

The Scrutiny Committee noted that the effect of item 2 of Schedule 1 of the Transitional Bill is that decisions made under the Building and Construction Industry (Improving Productivity) Act 2013 will be excluded from the application of the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act). While this is similar to provisions in the FWBI Act and the Fair Work Act 2009 (FWA), the Scrutiny Committee notes that the Administrative Review Council concluded that the current exemption of ABCC decisions from the application of the ADJR Act should be removed.29 After reviewing the Minister’s response, the Scrutiny Committee noted that it remained ‘concerned about the exclusion of review under the ADJR Act’ but left the ‘question of whether the proposed approach is appropriate to the Senate as a whole’.30

The Scrutiny Committee expressed concern about the number of instances of the delegation of legislative power in the Bill.31

Clause 120 of the Bill allows the Minister to make rules by legislative instrument. Clause 5 of the Bill includes a definition of ‘authorised applicant’, which is a person who is entitled to seek an order relating to a contravention of a civil remedy provision. The definition allows the rules to determine that someone is an authorised applicant, and the Scrutiny Committee commented that it was not clear why this should be left to regulation—or indeed why persons other than the Commissioner or persons affected would need to be authorised. Similarly, the Commissioner has a broad power of delegation to ‘a person…prescribed by the rules’ (paragraph 19(1)(d)) and the Federal Safety Commissioner has a similar power under paragraph 40(1)(c). After reviewing the Minister’s response, the Scrutiny Committee requested that the key information provided by the Minister be included in the Explanatory Memorandum, but noted that it left the ‘question of whether the proposed approach is appropriate to the Senate as a whole’.32

The Scrutiny Committee questioned the provision in subclause 6(4) that allows the rules to prescribe what is ‘building work’, given that this could extend the coverage of the Bill. Subclause 11(2) would similarly allow the rules to extend the application of the Act in relation to the exclusive economic zone and waters above the continental shelf. After reviewing the Minister’s response, the Scrutiny Committee requested that the key information provided by the Minister be included in the Explanatory Memorandum, but noted that it left the ‘question of whether the proposed approach is appropriate to the Senate as a whole’.33

Clause 43 provides that a Work Health and Safety Accreditation Scheme may be established under the rules. The Scrutiny Committee stated that too little detail was set out in the Bill, and the Explanatory Memorandum did not explain why it is appropriate for the Scheme to be established in this way.34 After reviewing the Minister’s response, the Scrutiny Committee requested that the key information provided by the Minister be included in the Explanatory Memorandum, but noted that it left the ‘question of whether the proposed approach is appropriate to the Senate as a whole’.35

26. Ibid., p. 24. 27. Senate Standing Committee on the Scrutiny of Bills, Alert digest, 9, 2013, 11 December 2013, p. 1. 28. Senate Standing Committee on the Scrutiny of Bills, Fourth report of 2014, 26 March 2014, pp. 89-126; Senate Standing Committee on the Scrutiny of Bills, Sixth report of 2014, 18 June 2014, pp. 258-263.

29. Administrative Review Council (ARC), Federal judicial review in Australia, report, 50, ARC, September 2012, pp. 204-205 and recommendation B4. 30. Senate Standing Committee on the Scrutiny of Bills, Fourth report of 2014, op. cit., p. 92. 31. Senate Standing Committee on the Scrutiny of Bills, Alert digest, 9, 2013, op. cit., pp. 6-9, 11-13 and 18. 32. Senate Standing Committee on the Scrutiny of Bills, Fourth report of 2014, op. cit., p. 95. 33. Ibid., pp. 97 and 101. 34. Senate Standing Committee on the Scrutiny of Bills, Alert digest, 9, 2013, op. cit., p. 8. 35. Ibid., p. 108.

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Paragraph 70(1)(c) provides that the purposes for which an inspector may exercise compliance powers include ‘purposes of a provision of the rules that confer functions or powers on inspectors’. The Scrutiny Committee considered that the scope of application of the coercive powers should be specified within the primary legislation.36 After reviewing the Minister’s response, the Scrutiny Committee requested that the key information provided by the Minister be included in the Explanatory Memorandum, but noted that it left the ‘question of whether the proposed approach is appropriate to the Senate as a whole’.37

The Scrutiny Committee raised a number of concerns about trespass on personal rights and liberties. First, there are several instances of the imposition of a reverse onus of proof in the Bill. For example, action taken by an employee based on health and safety concerns may not be regarded as ‘industrial action’, but the burden of proof is on the employee to prove that the action was based on the employee’s reasonable concern about an imminent risk to his or her health and safety and that he or she did not unreasonably fail to perform other available work (paragraph 7(2)(c) and subclause 7(4)). The Scrutiny Committee noted that equivalent provision in the FWA which excludes certain action taken for health and safety reasons from the definition of industrial action (paragraph 19(2)(c) of the FWA) does not reverse the onus of proof.38 In civil proceedings under clause 57 to do with unlawful picketing, the person has to establish that their actions were not unlawful.39 Similarly, if a person wishes to rely on an exception or excuse in civil proceedings, under clause 93 they bear the burden of proof.40 In relation to paragraph 7(2)(c), subclause 7(4), and clause 57 the Scrutiny Committee requested that the key information provided by the Minister be included in the Explanatory Memorandum, but noted that it left the ‘question of whether the proposed approach is appropriate to the Senate as a whole’.41 In relation to clause 93, the Scrutiny Committee thanked the Minister for his response, indicating that its concerns had been addressed.42

The Scrutiny Committee’s other concerns about personal rights and liberties included that clause 72 provides for authorised officers to enter premises (including residential premises in some cases) without a warrant.43 The Scrutiny Committee noted that in general entry should be by consent or under a warrant, and that the explanatory materials did not contain a compelling explanation for a departure from this principle.44 After reviewing the Minister’s response, the Scrutiny Committee noted that it:

… retains its concern about these entry powers. The Minister emphasises the importance of the efficient and effective resolution of investigations and claims to justify entry without consent or warrant. It is not clear to the committee why these concerns are of greater relevance in the industrial relations context than other regulatory contexts in which these powers are not available. As such, the committee is not persuaded that a compelling justification has been established for the proposed powers.

45

The Scrutiny Committee requested further advice from the Minister ‘as to whether consideration has been given, or can be given, to establishing a requirement for reporting to Parliament on the exercise of these powers’.46 After considering the Minister’s further response, the Scrutiny Committee noted that whilst the provisions are ‘primarily based on existing and previous provisions’:

…this does not, of itself, address the committee's scrutiny concerns. The committee does not consider that the requirements of investigative efficiency or the resource implications of obtaining warrants provide sufficiently compelling justification for the use of such coercive powers. 47

36. Senate Standing Committee on the Scrutiny of Bills, Alert digest, 9, 2013, op. cit., pp. 12-13. 37. Senate Standing Committee on the Scrutiny of Bills, Fourth report of 2014, op. cit., p. 116. 38. Senate Standing Committee on the Scrutiny of Bills, Alert digest, 9, 2013, op. cit., pp. 5-6; Fair Work Act 2009. 39. Senate Standing Committee on the Scrutiny of Bills, Alert digest, 9, 2013, op. cit., p. 10. 40. Ibid., p. 16. 41. Senate Standing Committee on the Scrutiny of Bills, Fourth report of 2014, op. cit., pp. 100 and 113. 42. Ibid., p. 122. 43. Senate Standing Committee on the Scrutiny of Bills, Alert digest, 9, 2013, op. cit., pp. 13-14. 44. Ibid., p. 13. 45. Senate Standing Committee on the Scrutiny of Bills, Fourth report of 2014, op. cit., p. 119. 46. Ibid.

47. Senate Standing Committee on the Scrutiny of Bills, Sixth report of 2014, 18 June 2014, pp. 258-263.

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The Scrutiny Committee noted that it left the ‘question of whether the proposed approach is appropriate to the Senate as a whole’.48

The Scrutiny Committee noted that subclauses 76(4), 77(4) and 99(8) provide that civil penalties for failure to comply with requests for information do not apply if the person has a reasonable excuse, but that there is no guidance as to what is a reasonable excuse.49 The Scrutiny Committee noted that the examination powers (clause 61) may trespass on the right to privacy, but that there is a justification for, and some safeguards around, the use of the power.50 After reviewing the Minister’s responses in relation to the above, the Scrutiny Committee requested that the key information provided by the Minister be included in the Explanatory Memorandum, but noted that it left the ‘question of whether the proposed approach is appropriate to the Senate as a whole’.51

The Scrutiny Committee observed that subclause 120(3) would enable certain rules (made for the purposes of subclauses 6(4), 6(5) or 10(2)) to take effect from the commencement of the subsection if the rules were made within 120 days. This would mean that the rules could operate retrospectively.52 After reviewing the Minister’s responses in relation to the above, the Scrutiny Committee requested that the key information provided by the Minister be included in the Explanatory Memorandum, but noted that it left the ‘question of whether the proposed approach is appropriate to the Senate as a whole’.53The Scrutiny Committee raised the question of whether the provision in clause 86 that the rules of evidence and procedure for civil matters (and not those for criminal matters) apply in relation to the civil remedy provisions is consistent with rights associated with a fair trial, but stated that it would wait for any views that may be expressed by the Parliamentary Joint Committee on Human Rights (PJCHR). The PJCHR views on that issue are examined below.54

The Scrutiny Committee noted that the Bills confer broad powers which in some cases are not sufficiently defined. These include the power of the Minister to appoint a Commissioner who has ‘suitable qualifications or experience’ and is of ‘good character’ (subclause 21(3)); the power of the Commissioner to appoint as an Australian Building and Construction Inspector a ‘consultant’ (paragraph 66(1)(c)) who has ‘suitable qualifications and experience’ to be a consultant (clause 32); and the similar power of the Federal Safety Commissioner (subclause 68(1)(c)). The Scrutiny Committee also noted that clause 28 does not require the Minister to provide reasons when terminating the appointment of a Commissioner.55

In relation to the appointment of the Commissioner (subclause 21(3)) the Scrutiny Committee noted the Minister’s response that ‘the appointment of a person as ABC Commissioner is subject to the Australian Government Merit and Transparency Policy administered by the Australian Public Service Commission’.56 In relation to paragraphs 66(1)(c) and 68(1)(c) (appointing consultants as ABC Inspectors and Federal Safety Officers respectively) and clause 28 (merits review of reasons for terminating the appointment of a Commissioner), the Scrutiny Committee requested that the key information provided by the Minister be included in the Explanatory Memorandum, but noted that it left the ‘question of whether the proposed approach is appropriate to the Senate as a whole’.57

The Scrutiny Committee raised concerns about the level of penalties in clause 49 and clause 81, noting in particular the great differences between them and similar penalties in other Commonwealth legislation, including the FWA.58 After reviewing the Minister’s response, the Scrutiny Committee requested that the key information provided by the Minister be included in the Explanatory Memorandum, but noted that it left the ‘question of whether the proposed approach is appropriate to the Senate as a whole’.59

48. Senate Standing Committee on the Scrutiny of Bills, Sixth report of 2014, op. cit., p. 263 49. Senate Standing Committee on the Scrutiny of Bills, Alert digest, 9, 2013, op. cit., p. 15. 50. Senate Standing Committee on the Scrutiny of Bills, Alert digest, 9, 2013, op. cit., p. 11. 51. Senate Standing Committee on the Scrutiny of Bills, Fourth report of 2014, op. cit., p. 121. 52. Senate Standing Committee on the Scrutiny of Bills, Alert digest, 9, 2013, op. cit., p. 18. 53. Senate Standing Committee on the Scrutiny of Bills, Fourth report of 2014, op. cit., p. 126. 54. Senate Standing Committee on the Scrutiny of Bills, Alert digest, 9, 2013, 11 December 2013, p. 15. 55. Senate Standing Committee on the Scrutiny of Bills, Alert digest, 9, 2013, op. cit., pp. 7-8, 11-12. 56. Senate Standing Committee on the Scrutiny of Bills, Fourth report of 2014, op. cit., p. 105. 57. Senate Standing Committee on the Scrutiny of Bills, Fourth report of 2014, op. cit., pp. 106 and 114. 58. Senate Standing Committee on the Scrutiny of Bills, Alert digest, 9, 2013, op. cit., p. 9. 59. Senate Standing Committee on the Scrutiny of Bills, Fourth report of 2014, op. cit., p. 111.

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Finally, the Scrutiny Committee noted that the original Explanatory Memorandum was ‘regrettably brief and uninformative’.60 The Scrutiny Committee’s recommendations for additional material to be included in the Explanatory Memorandum have not been acted upon, as the Explanatory Memorandum for the current Bills is in the same terms as the original Explanatory Memorandum.

Previous consideration by the Senate Education and Economics References Committee On 4 December 2013 the Senate referred the Government’s approach to re-establishing the ABCC to the Senate Education and Economics References Committee (References Committee) for inquiry and report by 27 March 2014. Details of the inquiry and the Reference Committee’s report are available at the inquiry web page.61 The References Committee’s report recommended that the Bills not be passed.62 It concluded that:

… in view of the failure of the government and proponents of the re-establishment of the ABCC to:

• Establish an economic or productivity case for the ABCC;

• Address the very serious incursions on human rights in the bills;

• Establish the uniqueness of the building and construction industry sufficient to warrant draconian powers and penalties;

• Establish that the coercive powers proposed for the ABCC are subject to sufficient oversight and safeguards;

• Establish that the ABCC would improve occupational health and safety in the building and construction industry;

the Senate not support the re-establishment of the Australian Building and Construction Commission and accordingly, not pass the Building and Construction Industry (Improving Productivity) Bill 2013 and related bill. 63

In a dissenting report, Coalition Senators strongly criticised the Reference Committee’s Inquiry into the Bills, stating that it was:

…at best been an abuse of process and at worst a meaningless exercise, given that the same witnesses did or could have appeared at the Legislation Committee inquiry. 64

The dissenting Coalition Senators noted that they stood ‘by the Legislation Committee’s report and recommendations of December 2013’, and therefore recommend that the Bills be passed.65

Policy position of non-government parties/independents The Opposition The Opposition, in the Second Reading Debate in the House of Representatives when the Bills were first introduced in 2013, opposed the legislation.66 During that debate, the Shadow Minister for Employment and Workplace Relations, Mr Brendan O’Connor argued that the performance of Fair Work Building and Construction (FWBC) had in fact been superior to the ABCC’s in terms of productivity and industrial disputation.67

During the recent Second Reading Debate in the House of Representatives that followed the reintroduction of the Bills, Mr O’Connor described the proposed powers of the ABCC as ‘extreme, unnecessary and undemocratic’

60. Senate Standing Committee on the Scrutiny of Bills, Alert digest, 9, 2013, op. cit., p. 18. 61. Senate Education and Employment References Committee, Inquiry into Government’s approach to re-establishing the Australian Building and Construction Commission, The Senate, Canberra, December 2013. 62. Senate Education and Employment References Committee, Government’s approach to re-establishing the Australian Building and

Construction Commission, Report, The Senate, Canberra, 27 March 2014, recommendation 1 (p. 74). 63. Ibid.

64. Ibid., p. 75. 65. Ibid.

66. B O’Connor, ‘Second reading speech: Building and Construction Industry (Improving Productivity) Bill 2013, Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013’, House of Representatives, Debates, 2 December 2013, p. 1158. 67. Ibid.

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and claimed that they compromise civil liberties.68 He also noted the Government’s reliance on the Cole Commission, which was initiated on allegations of lawlessness but did not lead to ‘one single criminal prosecution, let alone any finding of guilt’.69

The Australian Greens The Australian Greens, in the dissenting report on the Senate Education and Economics Committee inquiry, as noted above, recommended that the Bills not be passed. Mr Adam Bandt of the Greens has said of the Bills:

This is the curtain-raiser to the government’s return to Work Choices. They want to wind up on the unions and then they will come after the people’s rights at work. We won’t be part of it. 70

In the recent Second Reading Debate in the House of Representatives, Mr Bandt opposed the Bill and instead advocated for the establishment of a broad-based ‘national anticorruption watchdog’.71

Other non-government parties and independents

Senator Xenophon Senator Xenophon voted for the second reading stage of the original Bills in the Senate in 2015, but reserved his ‘position on the third reading’.72 During his contribution, Senator Xenophon noted:

• there is a need for ‘tougher laws in place when it comes to workplace safety’ and that ‘insofar as unions require a right of entry for the purpose of safety issues, then I think that is quite fundamental and ought not to be derogated from’

• that the concerns raised through the RCTUGC and the Boral court case could not be ignored73 and

• that he had ‘supported, unambiguously, the need to give the fair work building inspectorate the coercive powers to call in witnesses just as the ACCC, ASIC and other key regulators have’ as ‘without those powers, you will not get in my view some witnesses coming forward’.74

However, Senator Xenophon also posed the question: ‘are the measures in these Bills fair and proportionate to the issues that they are trying to address?’ and suggested that as there may be ‘legitimate concerns in other sectors’, there could be potential ‘benefit from the oversight provisions in these Bills’ being extended more broadly.75 Ultimately, Senator Xenophon concluded that:

At the end of the day—and I emphasise this—I want there to be a strong building and construction industry in this country. Building and construction can provide a real antidote to the job losses we are expecting in manufacturing. Having people working in a safe, working environment on good incomes is absolutely fundamental. My concern is that there needs to be some reform to help facilitate that. The issue is: to what extent do you go in this legislation? I think it is worth having this Bill go into committee for further negotiations in respect of this.

76

68. B O’Connor, ‘Second reading speech: Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2], Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 [No. 2]’, House of Representatives, Debates, (proof), 3 February 2016, p. 5. 69. Ibid., pp. 6-7. 70. A Bandt, Greens will fight attack on unions: Bandt, media release, 14 November 2013. 71. A Bandt, ‘Second reading speech: Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2], Building and Construction

Industry (Consequential and Transitional Provisions) Bill 2013 [No. 2]’, House of Representatives, Debates, (proof), 3 February 2016, p. 27. 72. N Xenophon, ‘Second reading speech: Building and Construction Industry (Improving Productivity) Bill 2013, Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013’, Senate, Debates, 17 August 2015, p. 5375. 73. By way of background, Chapter 8.2 of the Interim report of the RCTUGC explored the interactions between Boral (a multinational company

listed on the Australian Stock Exchange) and the Construction, Forestry, Mining and Energy Union (CFMEU), including the CFMEU’s imposition of a ‘black ban’ on Boral. In February 2013, Boral commenced action against the CFMEU in the Supreme Court of Victoria. In September 2015, the case was settled, with the CFMEU agreeing not to interfere in Boral’s business for a period of three years and to pay up to $9 million in legal expenses and damages. It would appear that Senator Xenophon’s reference to the ‘Boral court case’ is a reference to that litigation. See: J Heydon AC QC, ‘Chapter 8.2’, Interim report: Royal Commission into Trade Union Governance and Corruption, The Commission, Canberra, 19 December 2014 and cases referred to therein involving Boral and the CFMEU. See also: Boral, CFMEU black ban of Boral ends, ASX/ media release, 18 September 2015; E Hannan, ‘CFMEU agrees to leave Boral alone’, Australian Financial Review Weekend, 19 September 2015, p. 7. 74. N Xenophon, ‘Second reading speech: Building and Construction Industry (Improving Productivity) Bill 2013, Building and Construction Industry

(Consequential and Transitional Provisions) Bill 2013’, Senate, Debates, op. cit., p. 5376. 75. Ibid.

76. Ibid., p. 5377.

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Senators Lambie and Madigan Senator Jacqui Lambie opposed the original Bill, stating that ‘the intent of this Bill is to target and punish unions and organised labour groups, while neglecting to impose the same set of rules and standards on corporate Australia.’77 Senator Lambie, like a number of other independents and the Greens, also referred to the idea of establishing a broad-based anticorruption ‘watchdog’:

I believe that an equitable solution to corruption in the workplace and broader Australian society is the establishment of a permanent corruption watchdog whose star chamber powers will apply to bankers and union members equally. They must be applied equally. Combine that body with reformed world's best whistleblower or public interest disclosure laws that protect, encourage and reward genuine whistleblowers to come forward and then corruption in the workplace, corruption in government departments, corruption in the board rooms and corruption in political parties will be properly addressed.

78

Senator Lambie concluded that she would oppose the Bill because:

In the rush to achieve a quick outcome or get an easy conviction through bypassing the existing system of law and order, Australia runs the risk of damaging fundamental human and civil rights—building blocks of our nation. 79

It is not immediately apparent if Senator Lambie’s position described above has changed since the Bill was last debated, however the Senator voted in favour of Construction Industry Amendment (Protecting Witnesses) Bill 2015, which amended the FWBI Act to extend the period of time during which the Director of the FWBI could use its coercive investigatory powers (which were subject to a ‘sunset’ clause) by two years, until 1 June 2017, possibly indicating support for some of the measures contained in the Bill.80

Senator Madigan opposed the original Bill, stating ‘I oppose this Bill today because I believe in equality before the law’.81 Senator Madigan also indicated support for establishing a broad-based anticorruption ‘watchdog’, stating:

I want a body which deals with corruption, but not one which discriminates and only targets workers in one industry. Singling out the construction industry in this case reeks of political opportunism and does not address the issues we are facing more broadly… If the measures introduced in this Bill are necessary then they should be introduced across the board. Not just unions, but all corporations, government bodies and individuals should face the same level of scrutiny as this Bill would place on the construction industry. I would support that 100 per cent.

82

However, the Senator also expressed the view that ‘the measures proposed in this bill are draconian and would not be accepted if applied universally’.83 The above would suggest that the Senator is unlikely to support the Bill.

Senators Day and Leyonhjelm Senator Bob Day supported the original Bill, noting that ‘we are having this debate about reinstating the Australian Building and Construction Commission… because the ABCC is the only body capable of keeping the CFMEU in check on commercial building sites.’84 Senator Day noted:

The previous Labor government deliberately removed any notion that it was necessary to constrain criminal behaviour by certain unions. They were prepared to tolerate criminal behaviour—a failure. The police have failed to

77. J Lambie, ‘Second reading speech: Building and Construction Industry (Improving Productivity) Bill 2013, Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013’, Senate, Debates, 5 March, p. 1315. 78. Ibid.

79. Ibid., p. 1318. 80. J Lambie, ‘Second reading speech: Construction Industry Amendment (Protecting Witnesses) Bill 2015’, Senate, Debates, 11 May 2015, p. 2690. 81. J Madigan, ‘Second reading speech: Building and Construction Industry (Improving Productivity) Bill 2013, Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013’, Senate, Debates, 5 March 2015, p. 1301.

82. Ibid.

83. Ibid.

84. B Day, ‘Second reading speech: Building and Construction Industry (Improving Productivity) Bill 2013, Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013’, Senate, Debates, 17 August 2015, p. 5363.

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uphold the law in favour of so-called keeping the peace. They will tolerate criminal behaviour if it means keeping the peace… 85

Senator Day concluded that ‘whilst I am not generally in favour of expanding government power, the situation in the commercial construction industry has become so bad that we need to restore the ABCC. I support the Bill’.86

Whilst it does not appear that Senator David Leyonhjelm has publically spoken on the Bill, he voted in favour of the original Bill in 2015.87 In addition, he also moved an amendment to the Bill that would have subjected the entire Bill to an eight-year ‘sunset’ clause.88

Ms McGowan, Mr Katter and Senator Muir Ms Cathy McGowan, whilst not speaking to the Bill, voted in favour of the original Bill in December 2013 and also on the current Bills.89 Whilst it does not appear that Senator Ricky Muir has publically spoken on the Bill, he voted against it in 2015.90 During the recent Second Reading Debate in the House of Representatives, Mr Katter referred to both the importance of trade unions generally (in relation to workplace health and safety) and the undesirability of the Bill’s proposals to remove the right to silence and compel people to give evidence:

You can sit and spit upon trade unions as much as you like. But we could be still out there and dying. Don't think it would not be happening… The minister spoke about the rule of law. That is rather interesting. There are three great pillars of the rule of law, and one of them is your right to silence… Well, you do not have it in the building industry! You get put in jail if you remain silent. So do not come in here and preach about the rule of law, because you are spitting upon the rule of law in this legislation. If you want to fix up bad things, you make the effort of going in there and weed out the grafters who have pulled stunts when the concrete is being poured, and getting paid, personally—in their own pockets, not in the pockets of the union—and you track them down and put them in jail. Do not take away, from a whole branch of industry in Australia the right to work safely… So, your right to remain silent is a very important law. This legislation takes away your right to remain silent. And not only does it take away your right to remain silent; it also says that you have to give evidence. If you are asked to give evidence, you are compelled to give that evidence.

91

Mr Katter opposes the Bill and voted against it in the recent House of Representatives debate.92

Position of major interest groups Major employer groups including the Master Builders Association (MBA), the Housing Industry Association (HIA), the Australian Chamber of Commerce and Industry (ACCI), and the Australian Industry Group (AiG) welcomed the original Bill, saying that it would restore the rule of law in the building and construction industry. They particularly endorsed the extension of the Act to unlawful picketing.93

85. Ibid.

86. Ibid., p. 5365. 87. Australia, Senate, Journals, 107, 2013-2015, 17 August 2016, p. 2956. 88. Building and Construction Industry (Improving Productivity) Bill 2013, proposed amendment [sheet 7687], item 1. 89. Australia, House of Representatives, ‘Building and Construction Industry (Improving Productivity) Bill’, Votes and proceedings, 15, 2012-2013,

12 December 2013, p. 253; Australia, House of Representatives, ‘Building and Construction Industry (Improving Productivity) Bill [No. 2]’, Votes and proceedings, 169, 2013-2014-2015-2016, 4 February 2016, pp. 1852-1853. 90. Australia, Senate, Journals, 107, 2013-2015, op. cit., p. 2956. 91. B Katter, ‘Second reading speech: Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2], Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 [No. 2]’, House of Representatives, Debates, (proof), 3 February 2016, p. 100; Australia, House of Representatives, ‘Building and Construction Industry (Improving Productivity) Bill’, Votes and proceedings, 15, 2012-2013, op. cit.; Australia, House of Representatives, ‘Building and Construction Industry (Improving Productivity) Bill [No. 2]’, Votes and proceedings, 169, 2013-2014-2015-2016, op. cit. 92. Australia, House of Representatives, ‘Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2]’, Votes and proceedings, 169, 2015-2016, 4 February 2016, p. 1851-52. 93. Submissions to Senate Education and Employment Legislation Committee, Inquiry into the Building and Construction Industry (Improving Productivity) Bill 2013 and the Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 (Senate Education and Employment Legislation Committee Inquiry).

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AiG expressed reservations about the extension of the scope of the Act to the supply of materials because it may be a vehicle for extending construction industry terms and conditions of employment and the influence of the CFMEU.94 However, HIA welcomed the extension, saying that offsite disputes are as disruptive as onsite action.95

Trade unions oppose the Bill. The Australian Council of Trade Unions (ACTU) opposes any special laws for the building and construction industry. It notes that the assertion that the Bill deals with criminal activity in the industry is incorrect, as the Bill deals with civil actions and penalties. It contests the Government’s assertions about the increase in productivity attributable to the ABCC. It notes that the BCII Act was several times found to be in breach of International Labour Organisation conventions which Australia has ratified. Like the AiG, it is concerned that the extension of the scope of the Bill may bring parts of the transport, warehousing and manufacturing industries into the scope of the ABCC. It opposes the coercive information gathering powers in the Bill, and particularly the removal of safeguards on their exercise. It opposes giving the ABCC the right to intervene in proceedings under the FWA or the Independent Contractors Act 2006, or to re-open matters that have been settled. It opposes the transition provision which allows the ABCC to use its new powers in investigations of matters that happened before the Act takes effect, and particularly the provision that the ABCC can pursue matters which were settled before the Act takes effect.96

The CFMEU submission endorsed the ACTU’s. It also discussed the ABCC’s far greater focus on illegal activity by unions than by employers.97

Financial implications The Government previously committed an additional $35 million over four years to the re-established ABCC.98

Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bills’ compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. Noting that the Bills engage the rights to freedom of association, to just and favourable conditions of work, to a fair trial, to peaceful assembly, to freedom of expression, and to privacy and reputation, the Government considers that the Bills are compatible, because to the extent that they may limit human rights, those limitations are reasonable, necessary and proportionate.99

Parliamentary Joint Committee on Human Rights

The PJCHR has commented on the current Bills by referring to its comments on the 2013 Bills in its second report for the 44th Parliament.100 In that report, the PJCHR summarised its concerns as follows:

The committee seeks further information on various aspects of these Bills to determine their compatibility with the right to equality and non-discrimination, the right to freedom of association and to engage in collective bargaining, the right to freedom of assembly, the right to freedom of expression, the right to privacy, the right to a fair hearing, and the prohibition against self-incrimination.

101

After considering additional information provided by the Minister in relation to the above, the PJCHR concluded:

• clause 59 (project agreements) is likely to be incompatible with the right to organise and bargain collectively102

• the proposed coercive evidence-gathering powers ‘are likely to be incompatible with the right against self-incrimination’103

94. Australian Industry Group, Submission to Senate Education and Employment Legislation Committee Inquiry, pp. 4-5. 95. Housing Industry Association, Submission to Senate Education and Employment Legislation Committee Inquiry, p. 5. 96. Australian Council of Trade Unions (ACTU), Submission to Senate Education and Employment Legislation Committee Inquiry. 97. Construction, Forestry, Mining and Energy Union (CFMEU), Submission to Senate Education and Employment Legislation Committee Inquiry. 98. Explanatory Memorandum, Building and Construction Industry (Improving Productivity) Bill 2013, p. 4. 99. The Statements of Compatibility with Human Rights can be found at pages 50-65 of the Explanatory Memorandum to the Improving

Productivity Bill, op. cit., and at pages 10-11 of the Explanatory Memorandum to the Transitional Bill. 100. PJCHR, Thirty-fourth report of the 44th Parliament, 23 February 2016, p. 2. 101. PJCHR, Second report of the 44th Parliament, May 2014, paras 1.41-1.42, 1.49, 1.55, 1.61, 1.84, 1.101, 1.109, and 1.114; PJCHR, Tenth report

of the 44th Parliament, August 2014, p. 43 and PJCHR, Fourteenth report of the 44th Parliament, October 2014. 102. PJCHR, Tenth report of the 44th Parliament, op. cit., para 1.200.

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• the prohibition on picketing and further restrictions on industrial action are ‘incompatible with the right to freedom of association and the right to form and join trade unions’104

• the prohibition on picketing is also ‘likely to be incompatible with the right to freedom of assembly and the right to freedom of expression’105 and

• subclause 61(7) and clause 105 (that deal with the disclosure of information obtained by the ABCC) are incompatible with the right to privacy.106

Key issues and provisions The Bill re-establishes the ABCC, with some new (but significant) differences. As such, the Bill is consistent with recommendation 61 of the RCTUGC (that a building and construction industry regulator should exist, and be separate from the office of the Fair Work Ombudsman).107 However, given the similarities between the Bill and the Building and Construction Industry Improvement Bill 2003 and the BCII Act, this Bills Digest focuses on the differences and key areas that may attract controversy. It is strongly recommended that readers refer to the following publications, which are cited earlier in this Digest, for additional analysis:

• A Holmes and J Murphy, Building and Construction Industry (Improving Productivity) Bill 2013 [and] Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013, Bills Digest, 34, 2013-14, Parliamentary Library, Canberra, 2014

• S O’Neill and MA Neilsen, Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2011, Bills Digest, 80, 2011-12, Parliamentary Library, Canberra, 2011

• S O’Neill and MA Neilsen, Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2009, Bills Digest, 16, 2009-10, Parliamentary Library, Canberra, 2009

• P Prince, Building and Construction Industry Improvement Bill 2005 [and] Building and Construction Industry Improvement (Consequential and Transitional) Bill 2005, Bills Digest, 139-140, 2004-05, Parliamentary Library, Canberra, 2005 and

• P Prince and J Varghese, Building and Construction Industry Improvement Bill 2003, Bills Digest, 129, 2003-2004, Parliamentary Library, Canberra, 2004.

The main issues raised by the Bill, where they differ substantially from the BCII Act, are discussed below.

Expanded coverage of the Bill A number of provisions seek to expand the application of the Bill.

Geographical jurisdiction Clauses 5, 10, 11 and 12 extend the geographical application of the Act to:

• Australia's exclusive economic zone (EEZ) and waters above the continental shelf (including resources platforms and ships in the EEZ or those waters) and

• Christmas Island and Cocos (Keeling) Islands.108

Industry coverage Clause 6 contains the definition of building work, a key term that underpins the operation of the Act. The Bill defines building work as encompassing a broad range of activities including: construction, restoration, repair and

103. Ibid., para 1.231. 104. PJCHR, Fourteenth report of the 44th Parliament, op. cit., para 2.8. 105. Ibid., para 2.12. 106. Ibid., para 2.17. 107. Clauses 29 and 15; J Heydon AC QC, ‘Vol. 5: law reform and policy’, Final report of the Royal Commission into Trade Union Governance and

Corruption, The Commission, Canberra, 28 December 2015, p. 436. 108. Christmas Island is also covered by Fair Work Building Industry Act 2012 and was also covered by the Building and Construction Industry Improvement Act 2005 and Building and Construction Industry Improvement (Consequential and Transitional) Act 2005.

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demolition, any operation that is ‘part of or preparatory to’ such activities, and ‘pre fabrication of made-to-order components’ whether carried out on-site or off-site.

Paragraph 6(1)(e) expands the definition of building work to include the supply and transport of building goods directly to building sites (including resource platforms) for subsequent use in building work. The Explanatory Memorandum states that the expanded definition of building work is ‘not intended to pick up the manufacture of those goods’.109

The Bill retains the exclusions for small-scale residential construction projects and mineral exploration activities, contained in the BCII Act and the FWBI Act.110

Ancillary sites Clause 9 defines ancillary sites. Relevantly, this includes sites from which goods are transported or supplied directly to a building site or sites where building industry participants do work relating to building work. This concept was not included in the BCII Act or the FWBI Act.

Impact of expanded coverage The effect of the above provisions is to effectively extend the operation of the Bill to the transport, supply and resources sectors both within Australia and also to operations conducted in Australia’s EEZ or in waters above the continental shelf, provided there is a relevant connection to building work as defined in the Bill.111 As a result, arguably the Bill could therefore be used to target secondary boycotts (an issue raised by the PC Report and Harper Review), at least in relation to coercing a person or third party to engage (or not engage) a particular independent contractor or building contractor.112

Coercive powers The table in Appendix D provides a summary of the differences between the current coercive powers under the FWBI Act and those proposed by the Bill. A detailed analysis follows below.

Current coercive powers The FWBC retained the powers originally provided by the BCII Act to the then ABCC to require a person to give information, produce documents and attend an interview to answer questions. However, the FWBI Act introduced a number of safeguards on the use of the coercive powers. Importantly these include that:

• the FWBC must apply for an examination notice to a Presidential Member of the Administrative Appeals Tribunal (AAT)113 who

• must be satisfied that a case has been made out for its use.114

The FWBI Act also provides that the Commonwealth Ombudsman must be notified whenever an examination notice is issued.115 Further, the FWBC must provide a report on, and video recording and transcript of, the examination to the Commonwealth Ombudsman, who must then review the examination and provide annual reports to Parliament.116

Proposed coercive powers The Bill re-instates the previous coercive investigatory powers of the Commissioner under the BCII Act, and hence reflects recommendation 62 of the RCTUGC.117 Where the Commissioner reasonably believes that a

109. Explanatory Memorandum, Building and Construction Industry (Improving Productivity) Bill 2013, op. cit., p. 6. 110. Paragraphs 6(1)(f), (g) and (h) and subclauses 6(2), (3). 111. Explanatory Memorandum, Building and Construction Industry (Improving Productivity) Bill 2013, op. cit., p. 6-7.; R Maharaj, ‘ABCC Bill expands coverage and cracks down on picketing’, Workforce, no. 18935, 15 November 2013, p. 4; B Feltham and M Xu, ‘Australia: the Federal

Coalition's quick move to introduce IR changes’, Mondaq website, 26 November 2013. 112. Paragraphs 52(b) and (c). 113. Fair Work (Building Industry) Act 2012, section 45. 114. Ibid., section 47. 115. Ibid., section 49. 116. Ibid., section 54A. 117. J Heydon AC QC, ‘Vol. 5: law reform and policy’, Final report of the Royal Commission into Trade Union Governance and Corruption, op. cit.,

p. 459.

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Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2] [and] Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 [No. 2] 19

person has information or documents relevant to an investigation or is capable of giving evidence relevant to an investigation, Chapter 7, Part 2 of the Bill provides that the Commissioner can require a person to:

• give information or produce documents to the Commissioner118

• attend an examination before the Commissioner119 and

• answer questions or provide information under oath or affirmation.120

In addition, where (amongst other reasons) an inspector reasonably believes that the Act, a designated building law121 or the Building Code is being breached they can:

• enter a premises without force122

• require a person to provide their name and address123

• inspect any work, process or object

• interview any person

• require a person to produce a record or document

• inspect and make copies of records or documents or

• take samples of any goods or substances.124

In addition, outside of the powers related to authorised officers power to enter premises, authorised officers can also issue a notice requiring a person to produce documents or records.125 In contrast, Federal Safety Officers may only exercise such powers for the purpose of ascertaining if relevant bodies meet and comply with the accreditation requirements, or have complied with the conditions of accreditation in respect of building work.126

Once information is obtained clause 105 allow the Commissioner to disclose that information (other than ‘protected information’) in certain circumstances to other persons or bodies, including, for example, where:

… that the disclosure is likely to assist in the administration or enforcement of a law of the Commonwealth, a State or a Territory. 127

The PJCHR concluded that the information sharing powers proposed by clause 105 are incompatible with the right to privacy.128

Ombudsman oversight of use of coercive powers Unlike the existing Act, the Bill does not require the Commissioner to apply to the AAT for an examination notice.129 However, the Commissioner must still provide a report on and video recording and transcript of, the examination to the Commonwealth Ombudsman, who must then review the examination and provide annual reports to Parliament.130 As drafted, the Bills are consistent with recommendation 63 of the RCTUGC.131

118. Paragraphs 61(2)(a), (b). 119. Paragraph 61(2)(c). 120. Subclause 61(5). 121. ‘Designated building law’ is defined at clause 5 of the Bill as: the Independent Contractors Act 1996, the Fair Work Act 2009 or the Fair Work

(Transitional Provisions and Consequential Amendments) Act 2009 or a Commonwealth industrial instrument (which is separately defined in clause 5). 122. Subclauses 72(1), (2). 123. Clause 76. 124. Subclause 74(1). 125. Clause 77. 126. Subclause 72(2). 127. Paragraph 105(2)(b). 128. PJCHR, Fourteenth report of the 44th Parliament, op. cit., para 2.17. 129. Clause 61. 130. Clauses 64 and 65. 131. J Heydon AC QC, ‘Vol. 5: law reform and policy’, Final report of the Royal Commission into Trade Union Governance and Corruption, op. cit., p. 459.

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No privilege against self-incrimination Clause 102 removes the privilege against self-incrimination by providing that a person is not excused from providing information to the Commissioner because to do so would contravene another law or might tend to incriminate or otherwise expose the person to a penalty or other liability.

Subclause 102(2) provides both use and derivative use immunity by prohibiting the use of any information, answer given or document produced in proceedings other than those related to clause 62 (failing to comply with an examination notice) or proceedings under the Criminal Code Act 1995 related to giving false or misleading statements or documents or obstructing Commonwealth officials.132 As such, clause 102 effectively replicates section 53 of both the FWBI Act and BCII Act.

In relation to the availability of both use and derivate use immunity, the RCTUGC noted:

Cognate provisions in relation to the compulsory powers of ASIC and the ACCC limit the immunity conferred so that they apply only to the answers given or information provided in response to notices. The immunity under these provisions does not extend to documents and there is no derivative use restriction. 133

(emphasis added)

The RCTUGC then recommended:

Consideration be given to redrafting the use/derivative use immunity provisions in clauses 102 and 104 of the Building and Construction Industry (Improving Productivity) Bill 2013 (Cth) to provide protections equivalent to those available in relation to the powers exercised by the Australian Securities and Investments Commission. 134

(emphasis added).

In summary, the RCTUGC recommended that the above provisions, in relation to use immunity, be narrowed as to only apply to the recipient of the individual notice, and only to answers or information given under compulsion, not to documents obtained or created when the recipient of notice was under no compulsion.135 In relation to derivative use immunity, the RCTUGC recommended that subclauses 102(2) and clause 104 be amended to remove derivate use entirely as ‘valuable evidence may be acquired by obtaining documents and answers in compulsory examinations’.136 However, in contrast to the view of the RCTUGC, the PJCHR concluded that the proposed coercive evidence-gathering powers, even with use and derivative use immunity available in some circumstance were ‘likely to be incompatible with the right against self-incrimination’.137

Additional protections Clause 103 extends additional protection to persons who comply with an examination notice by providing that any information, documents or answers to questions cannot be used in any proceedings for contravening any other law because of complying with the examination notice. It also provides that they are not liable in any civil proceedings for any loss, damage or injury of any kind suffered as a result of complying with the examination notice. As such, clause 103 effectively replicates section 54 of both the FWBI Act and BCII Act.

Retrospective operation of coercive investigatory powers Item 2 of Schedule 2 of the Transitional Bill provides that the powers related to obtaining information apply in relation to any contravention or alleged contravention of either the BCII Act or the existing FWBI Act that occurred or is alleged to have occurred before the transition time.

132. ‘Use’ immunity is defined as where a person is required to answer questions which would tend to incriminate or expose him or herself to a penalty, any information or evidence given that would tend to incriminate the person may not be used against him or her directly in court. In comparison, ‘derivative use’ immunity is where any information or evidence given that would tend to incriminate the person may not be used to gather other evidence against that person: Attorney-General’s Department (AGD), A guide to framing Commonwealth offences, infringement notices and enforcement powers, AGD, Canberra, September 2011, pp. 97, 98.

133. J Heydon AC QC, ‘Vol. 5: law reform and policy’, Final report of the Royal Commission into Trade Union Governance and Corruption, op. cit., para 1.55 (p. 457). 134. J Heydon AC QC, ‘Vol. 5: law reform and policy’, Final report of the Royal Commission into Trade Union Governance and Corruption, op. cit., p. 459. 135. Ibid., p. 458 136. Ibid., p. 454. 137. PJCHR, Tenth report of the 44th Parliament, op. cit., para 1.231.

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Criminal Offences The Bill contains a number of criminal offences similar to those contained in section 52 of the FWBI Act. Under clause 62, it is an offence punishable by six months imprisonment not to comply with an examination notice to:

• provide information

• produce a document

• attend an examination to answer questions

• take an oath or affirmation or

• answer questions during the examination.138

The penalties proposed in clause 62 are consistent with recommendation 62 of the RCTUGC and the legislation cited in support of that recommendation.139

Clause 106 makes it an offence punishable by 12 months imprisonment for an entrusted person to make a record or disclose protected information, except in specific circumstances. It effectively replicates section 65 of both the FWBI Act and BCII Act.

Civil penalty provisions The FWBI Act removed the specific penalties for participants in the building industry, making them subject to the ordinary penalties under the FWA.140 Like the BCII Act, the Bill would restore specific building industry penalties.

The Bill, like the BCII Act, creates two categories of civil penalties:

• Grade A (maximum penalty of 1,000 penalty units for a body corporate and 200 for a natural person) and

• Grade B (maximum penalty of 100 penalty units for a body corporate and 20 for a natural person).141

The civil penalty offences created by the Bill are listed in the table in Appendix A. The offences largely replicate the offences contained in the BCII Act (for example, coercion and discrimination) with the exception of the new unlawful picketing civil penalty offence, discussed elsewhere in this Bills Digest.

In this respect, the Bill differs substantially from what the RCTUGC recommended. The RCTUGC recommended that the FWA be amended to increase the maximum penalties for coercion and prohibited industrial action. It also recommended that the FWA be amended so that picketing by employees or employee associations is ‘industrial action’, and to ‘deal specifically with consequences of industrially motivated pickets’.142

The Bill (which preceded the RCTUGC) does not seek to amend the FWA in the manner noted above. Instead, it introduces increased penalties for coercion and prohibited industrial action and introduces a picketing offence— but only applies those to the building and construction industry (and associated sectors, as discussed under the heading ‘Expanded coverage of the Bill’ above). As such, whilst civil penalty provisions are consistent with the intent of the recommendations of the RCTUGC, they are applied more narrowly than recommended and hence would only partially fulfil those recommendations.

Industrial action The Bill, at clause 7, contains its own definition of industrial action. It largely replicates the definition contained in section 19 of the FWA, with one notable difference. Subclause 7(4) provides that where a person claims their action was based on a reasonable concern about an imminent risk to their health or safety, they bear the burden of proving their concern and its reasonableness. However, as noted in the Explanatory Memorandum it ‘does

138. In addition, intentionally providing false or misleading information or documents would be an offence (punishable by 12 months imprisonment) under either section 137.1 or 137.2 of the Commonwealth Criminal Code Act 1995. 139. J Heydon AC QC, ‘Vol. 5: law reform and policy’, Final report of the Royal Commission into Trade Union Governance and Corruption, op. cit., paras 118-129 and p. 459. 140. O’Neill and Neilsen, Bills Digest 2009-10, op. cit., p. 25. 141. Clause 5, subclause 81(2) of the Bill. See subsections 4(1) and 49(2) of the BCII Act. Under section 4AA of the Crimes Act 1914, a penalty unit is

$180.

142. J Heydon AC QC, ‘Vol. 5: law reform and policy’, Final report of the Royal Commission into Trade Union Governance and Corruption, op. cit., recommendation 66, p. 478.

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Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2] [and] Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 [No. 2] 22

not require the employee to prove that there is in fact an imminent risk’.143 Subclause 7(4) of the Bill replicates subsection 36(2) of the BCII Act.

For ease of comparison, the definitions of industrial action contained in the BCII Act, the Bill and FWA are set out in Appendix B. Of note, the Bill does not reinstate the BCII Act requirement of industrial action needing to be ‘industrially motivated’ before being unlawful.144

Protected industrial action Clause 8 narrows the scope of protected industrial action in comparison to the definition provided by the FWA. The clause introduces the concept of protected persons, which are:

• an employee organisation or officer of the organisation (within the meaning of the FWA), that is a bargaining representative for a proposed enterprise agreement

• members of the employee organisation employed by the employer (and who will be covered by the proposed enterprise agreement) or

• an employee who is a bargaining representative for the proposed enterprise agreement.145

For the purposes of the Bill, action will not be protected industrial action if it is engaged in in concert with one or more non-protected persons.146 In addition, action will not be protected industrial action if the organisers include one or more non-protected persons.147

In effect, industrial action will not be protected under the Bill where it is supported by persons other than those directly involved in the bargaining for the relevant enterprise agreement. This largely replicates subsections 40(1) and (2) of the BCII Act.

Constitutionally covered entities In New South Wales v Commonwealth (Work Choices case),148 the constitutional validity of the Workplace Relations Act 1996 (Cth) (as amended by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth)) was challenged. The High Court held that the legislation was a legitimate exercise of the Commonwealth’s corporations power, and as a result, the corporations power is now used as the primary constitutional basis for industrial relations legislation. Since the decision in the Work Choices case, all states other than Western Australia have referred their private sector industrial relations powers to the Commonwealth.149

Clause 45 provides that the prohibitions against unlawful industrial action and unlawful picketing must relate to a constitutionally covered entity. The interconnected definitions in clause 5 define a constitutionally covered entity as:

• a corporation to which paragraph 51(xx) (the corporations power) of the Constitution applies

• the Commonwealth or a Commonwealth authority within the meaning given by the Commonwealth Authorities and Companies Act 1997

• a body corporate incorporated in a territory or

• an organisation within the meaning given by the Fair Work (Registered Organisations) Act 2009.

The definition in clause 45 and reference to the corporations power is necessary to ensure the prohibitions against unlawful industrial action and unlawful picketing apply as broadly as possible, within Constitutional limits. Without it, there would be a possibility of parts of the legislation being ruled invalid on the basis of overstepping the Commonwealth’s law making powers.

143. Explanatory Memorandum, Building and Construction Industry (Improving Productivity) Bill 2013, op. cit., p. 8. 144. Building and Construction Industry Improvement Act 2005, subsection 36(1) and section 37(a). 145. Subclause 8(3). 146. Paragraph 8(2)(a). 147. Paragraph 8(2)(b). 148. New South Wales v Commonwealth 81 ALJR 34, 231 ALR 1, [2006] HCA 52. 149. See also: Industrial Relations (Commonwealth Powers) Act 2009 (NSW); Fair Work (Commonwealth Powers) and Other Provisions Act 2009

(Qld); Fair Work (Commonwealth Powers) Act 2009 (SA); Industrial Relations (Commonwealth Powers) Act 2009 (Tas); Fair Work (Commonwealth Powers) Act 2009 (Vic).

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Despite this, it is likely, however, that not all workers and businesses in the building and construction industry will be covered. It is unclear, for example, whether employees of an unincorporated sub-contractor (which fall outside the corporations power of the Commonwealth to regulate) on a building site would be covered by the Bill, especially if any action they take is only in relation to their own employer.150

Unlawful industrial action Clause 5 provides that action is unlawful industrial action if:

• it is industrial action and

• is not protected industrial action.

As noted previously, the Bill does not reinstate the BCII Act requirement of industrial action needing to be ‘industrially motivated’ before being unlawful.151

Effect of new definitions The new interconnected definitions of industrial action, protected industrial action and unlawful industrial action exclude any industrial action that is not:

• engaged in and organised solely by protected persons (that is, persons directly involved as bargaining representatives in negotiations for, or who will be covered by, a proposed enterprise agreement) and

• authorised through the required protected action ballot process contained in the FWA.

Such action will be unlawful industrial action and, under clause 46 of the Bill, attract a Grade A civil penalty ($34,000 for individual, $170,000 for body corporates). The PJCHR noted that further restrictions on industrial action proposed by the Bill are ‘incompatible with the right to freedom of association and the right to form and join trade unions’.152

Unlawful Picketing Under previous and existing legislation there are no prohibitions on picketing.

New unlawful picketing offence The Bill creates the new offence of engaging in or organising an unlawful picket, punishable by a Grade A civil penalty ($34,000 for individual, $170,000 for body corporates).153 To be unlawful, a picket must meet the two limbs provided in paragraphs 47(2)(a) and (b) respectively.

First limb of unlawful picketing The first limb, in paragraph 47(2)(a), relates to the purpose and impact of the picket. For a picket to be unlawful it must:

• have the purpose of preventing or restricting a person from accessing or leaving a building site or ancillary site or

• directly prevent or restrict a person from accessing or leaving a building site or ancillary site or

• reasonably be expected to intimidate a person accessing or leaving a building site or ancillary site.

However, even if one of the above elements of the first limb is satisfied, a picket will not be unlawful unless it also satisfies one of the four elements contained in the second limb in subclause 47(2). Those elements relate to the motivation or lawfulness of the picket.

150. For a detailed analysis of the constitutional coverage, see the discussion in fn 28 in P Prince and J Varghese, Building and Construction Industry Improvement Bill 2003, Bills digest, 129, 2003-2004, Parliamentary Library, Canberra, 2004 and fn 15 in P Prince, Building and Construction Industry Improvement Bill 2005 [and] Building and Construction Industry Improvement (Consequential and Transitional) Bill 2005, Bills digest, 139-140, 2004-2005, Parliamentary Library, Canberra, 2005.

151. Building and Construction Industry Improvement Act 2005, subsection 36(1) and paragraph 37(a). 152. PJCHR, Fourteenth report of the 44th Parliament, op. cit., para 2.8. 153. Subclause 47(1).

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Second limb of unlawful picketing The first two elements of the second limb relate to the motivation of the picket. They provide that (if the first limb is satisfied) a picket will be unlawful where it:

• is motivated for the purpose of supporting or advancing claims against a building industry participant in respect of the employment of employees or

• is motivated for the purpose of supporting or advancing claims against a building industry participant in respect of the engagement of contractors by the building industry participant.154

As drafted, a court is required to consider the mental state (motivation) of the participants or organisers of the picket. Due to clause 56, a picket will satisfy either of the above two elements if the reason (or a reason, if there is more than one) it was organised or engaged in was to support one of the specified types of claims against a building industry participant.

As drafted, subparagraph 47(2)(b)(i) is highly unlikely to apply to building industry participants other than building employees, contractors and employee orientated building associations and their officers.

The other two elements of the second limb have a broader scope of application. Relevantly a picket will be unlawful where it:

• is motivated for the purposes of advancing industrial objectives of a building association155 or

• is unlawful (apart from the operation of clause 47 of the Bill).156

In relation to pickets motivated for the purposes of ‘advancing the objectives of a building association’, this would appear to have a broader application than the two elements of the second limb contained in paragraph 47(2)(b)(i) as it can potentially apply to pickets organised or engaged in by persons in support of employer or contractor building associations, and not just to employee building associations.

The final element of the second limb is that the picket is unlawful (apart from the operation of clause 47 of the Bill). The effect of the final element is where persons engage in a picket that:

• is not protected industrial action under the Bill or

• was protected industrial action under the FWA but subsequently the FWC made an order under section 418 of the FWA to stop the action

the action is unlawful for the purposes of subparagraph 47(2)(b)(iii) and hence the picket is unlawful. In addition, the final element of the second limb would also be engaged where the picket breaches relevant state or territory:

• legislation governing protests or

• criminal legislation (for example, trespass).

As a result, a picket will attract the penalty proposed by the Bill where it meets the first limb and is otherwise unlawful or where it was organised to advance various industrial claims. The Explanatory Memorandum notes that clause 47 will not capture pickets that are lawful and organised for non-industrial purposes such as drawing attention to various social, environmental or community issues.157

In addition to prohibiting unlawful pickets, clause 48 allows a person to apply to a relevant court for an injunction to prevent an unlawful picket from occurring or to stop an unlawful picket already underway.

As picketing offences will only apply to the building and construction industry (and associated sectors, as discussed under the heading ‘Expanded coverage of the Bill’ above), the provisions discussed above only partially fulfil recommendation 66 of the RCTUGC. That is because the RCTUGC recommended that the FWA be amended (and hence would apply to all industries and sectors covered by that Act) so that picketing by

154. Subparagraph 47(2)(b)(i). 155. Subparagraph 47(2)(b)(ii). 156. Subparagraph 47(2)(b)(iii). 157. Explanatory Memorandum, Building and Construction Industry (Improving Productivity) Bill 2013, op. cit., p. 59.

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employees or employee associations falls under the definition of ‘industrial action’, and to also deal with the consequences of industrially motivated pickets.158

In contrast, the PJCHR stated that the prohibition on picketing proposed by the Bill is ‘likely to be incompatible with the right to freedom of assembly and the right to freedom of expression’.159

Prosecution after settlement of civil disputes Section 73 of the FWBI Act prevents the Commissioner from continuing or instituting proceedings in relation to matters that have been settled by the parties. This Bill does not include a similar clause to prevent such action.

In the second reading speech to the Bill when it was first introduced, the then Minister for Education and Leader of the House stated that:

The inspectorate was hampered by quite novel restrictions on its ability to initiate or continue with proceedings if matters the subject of litigation had been settled by the parties. These amendments were introduced without any prior notice or forewarning by the Leader of the Opposition when he was the responsible minister. They are equivalent to a person running a red light and causing an accident and then police being unable to charge that person with any offences, including running the red light, if that person has settled with the other person involved in the accident.

160

Hence it appears that the Commissioner will be able to pursue civil or criminal charges in circumstances where civil liability has been settled.

Clause 20 of Schedule 2 of the Transitional Bill provides that the Commissioner may participate in a proceeding, or institute a proceeding, under the FWBI Act even if the proceeding relates to a matter that was settled before the new Act commences. This is in effect a retrospective provision. It is possible that parties have reached an agreement in good faith on the assumption that that would be the end of the matter, only to have it reopened under a law that was not in force at the time.161 The Bill, as drafted, is consistent with recommendation 65 of the RCTUGC.162

Reverse onus of proof Clause 57 of the Bill reverses the onus of proof (in relation to reasons for actions) from the Commissioner to the defendant in proceedings related to contraventions of the Bill’s civil penalty provisions.

As a result, in relation to contraventions of the civil penalty provisions (including unlawful picketing), in any proceedings it must be assumed that the relevant action that would constitute a contravention was (or is) being taken by the defendant for the relevant reason or with the relevant intent, unless the defendant proves otherwise. The Explanatory Memorandum refers to section 361 of the FWA, which provides that where a person brings an application for adverse action under Part 3-1, it must be presumed that the action was taken for the alleged prohibited reason.163 This presumption can, of course, be displaced by evidence led by the respondent (for example, in a general protections case, of the employee’s unsatisfactory performance).

The presumption arises where the applicant establishes facts that provide the basis for the alleged prohibited conduct by the respondent.164 Such clauses are not uncommon, and are usually imposed where evidence relevant to the complaint is likely to be held by the defendant and the complaint would be difficult, if not impossible, to establish in the absence of that evidence. As noted by one academic (in relation to proving discrimination claims):

a reverse onus provision offers a clear advantage over purs[u]ing a complaint under anti-discrimination legislation because it requires the employer to articulate the reason for the impugned conduct. The actual motivation for

158. J Heydon AC QC, ‘Vol. 5: law reform and policy’, Final report of the Royal Commission into Trade Union Governance and Corruption, op. cit., recommendation 66, p. 478. 159. PJCHR, Fourteenth report of the 44th Parliament, op. cit., para 2.12. 160. C Pyne (Minister for Education), ‘Second reading speech: Building and Construction Industry (Improving Productivity) Bill 2013’, op. cit., p. 15. 161. See ACTU, Submission to Senate Education and Employment Legislation Committee Inquiry, op. cit., p. 26. 162. J Heydon AC QC, ‘Vol. 5: law reform and policy’, Final report of the Royal Commission into Trade Union Governance and Corruption, op. cit.,

recommendation 65, p. 478. 163. Explanatory Memorandum, Building and Construction Industry (Improving Productivity) Bill 2013, op. cit., p. 23. 164. Cauchi v Metal Coat [2010] FMCA 971.

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acting in a particular way is something known, by and large, only to that employer. Under anti-discrimination law it is usually up to the complainant, in establishing direct discrimination, to prove the [causal] link by adducing evidence to substantiate an alleged reason or to establish the facts from which an inference can be drawn. The reserve onus mandates greater input by the employer in this process, and will assist individuals in making out a workplace age discrimination complaint.

165 (emphasis added).

It has also been noted that, from the majority of cases dealing with discrimination, a reverse onus of proof is not a panacea for allegations.166 It appears that similar reasoning is behind the imposition of the reverse onus of proof imposed by the Bill, as the Government has justified it on the basis that:

…in the absence of such a clause, it would be extremely difficult, if not impossible, for a complainant to establish that a person acted for an unlawful reason. 167

Project agreements Subclause 59(1) provides that an agreement is unenforceable to the extent that it relates to building employees if:

• the agreement is entered into with the intention of securing standard employment conditions for building employees in respect of building work that they carry out at a particular building site or sites

• not all the employees are employed in a single enterprise

• the agreement is not a Commonwealth industrial instrument (for example, an enterprise agreement or modern award) and

• a party to the agreement is a constitutional corporation.

The effect of subclause 59(1) and the definition of a single enterprise in subclause 59(2), is to prohibit agreements that seek to secure standard employment conditions on a particular building site (or sites) where there are employees employed by a number of different enterprises (for example, employed by subcontractors or joint venture partners). Item 2 of Schedule 2 of the Transitional Bill provides that clause 59 of the Bill applies to agreements entered into after the transition time. The PJCHR stated that clause 59 is ‘likely to be incompatible with the right to organise and bargain collectively’.168

Chapter 3—The Building Code Clause 34 enables the Minister to issue a Building Code, in similar terms to section 27 of the FWBI Act. As under that Act, the Code is to be a legislative instrument. It may deal with work health and safety matters relating to building work. However, the Bill omits the requirement for the Minister to take into account relevant recommendations of the Federal Safety Commissioner. The existing FWBI Act and the previous BCII Act (at section 27) both included this requirement.

Clause 35 restores a provision that was in the BCII Act (but not the FWBI Act) which allows the Minister to require a written report as to the extent of compliance with the Building Code for particular building work.169

Chapter 4—The Federal Safety Commissioner Clause 38 lists the functions of the Federal Safety Commissioner. As is currently the case under section 30 of the FWBI Act, they include the promotion of work health and safety and the promotion of the WHS Accreditation Scheme. In contrast to the current Act and the previous BCII Act they do not include functions of monitoring compliance with, and disseminating information about, health and safety provisions of the Building Code.

165. T MacDermott, ‘Challenging age discrimination in Australian workplaces: from anti-discrimination legislation to industrial regulation’, UNSW Law Journal 34(1), p. 204. 166. See for example: T MacDermott, ‘Challenging age discrimination in Australian workplaces: from anti-discrimination legislation to industrial regulation’, op. cit., p. 204; Hammond v Boutique Kitchens & Joinery Pty Ltd (2010) 198 IR 336, [2010] FMCA 622 (16 August 2010); Liquor

Hospitality and Miscellaneous Union v Arnotts Biscuits Ltd (2010) 188 FCR 221, [2010] FCA 770 (23 July 2010). 167. Explanatory Memorandum, Building and Construction Industry (Improving Productivity) Bill 2013, op. cit., p. 23. 168. PJCHR, Tenth report of the 44th Parliament, op. cit., para 1.200. 169. Building and Construction Industry Improvement Act 2005, section 28.

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Clause 40 deals with delegations and directions to delegates by the Federal Safety Commissioner. It includes a new requirement that such directions that are of a general application are to be legislative instruments (subclause 40(5)).

The Transitional Bill Schedule 1 of the Transitional Bill repeals the FWBI Act, and makes consequential amendments to the Administrative Decisions (Judicial Review) Act 1977, the Fair Work (Registered Organisations) Act 2009, and the Jurisdiction of Courts (Cross-Vesting) Act 1987. Item 6 of Schedule 1 will amend the reference to the Privacy Act 1988 in the Building and Construction Industry (Improving Productivity) Act 2013 (the new Act) to reflect the commencement of the new Privacy Principles.

Schedule 2 contains the transitional provisions. Items 2(3) to 2(5) extend the powers to obtain information in the Building and Construction Industry (Improving Productivity) Act (the new Act) to alleged contraventions of the previous BCII Act and the existing FWBI Act before the commencement of the new Act, even if an investigation was begun under those Acts. Item 2(6) allows the Commissioner to intervene in court proceedings, or make submissions in FWC proceedings, that began before the commencement of the new Act. Neither the Explanatory Memorandum nor the Scrutiny of Bills Committee Alert Digest comments on the retrospective aspect of these provisions. However, the Senate Committee dissenting report by the Labor Senators was critical, arguing that any such powers, if they are to be introduced, should operate prospectively, and not allow the ABCC to initiate or pursue matters (including instigating court proceedings) in respect of matters that were settled prior to the new Act taking effect. The report states ‘it is a fundamental principle of fairness and a basic precept of the rule of law that laws are applied prospectively. Parties should be entitled to rely upon the law as it exists and applies at the time’.170

Items 3 and 4, items 6 to 13, items 15 to 19, and items 21 to 24 provide for continuity of functions.

Item 5 terminates the appointments of members of the Fair Work Building Industry Inspectorate Advisory Board and of the Independent Assessor (though they can be appointed under the new Act).

Item 14 provides for continuation of payments of expenses for attending examinations that were ordered under the old Act, except for legal allowances, which are currently provided for in the FWBI Act and Regulation 7.13 of the Fair Work (Building Industry) Regulations 2005.171 (Payments for legal expenses will not be made for new proceedings.)

As discussed above, item 20 allows the Commissioner to participate in, or institute, a proceeding under the FWBI Act even if the proceeding relates to a matter that was settled before the new Act commences.

Item 26 provides for the making of rules by the Minister.

Concluding comments The Bill not only repeals the FWBI Act and re-establishes the ABCC, it enlarges both its jurisdictional and industry sector application. It also provides new coercive powers (with retrospective operation), re-introduces a number of criminal and civil penalty offences previously contained in the BCII Act, and introduces a new civil penalty offence of unlawful picketing. It provides for penalties for building industry participants which are considerably higher than those available under the FWA.

In effect, the Bill creates (in relation to industrial action and picketing) a new and different set of industrial relations rules that apply only to persons associated with the building and construction industry.

170. Senate Education and Economics Legislation Committee, Building and Construction Industry (Improving Productivity) Bill 2013 [Provisions] and Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013 [Provisions], report, The Senate, Canberra, 2 December 2013, p. 19.

171. Fair Work (Building Industry) Regulations 2005.

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Appendix A Table 2: Civil penalty offences

Offence Provision Grade

Engaging in or organising unlawful industrial action 46 A

Engaging in or organising an unlawful picket 47(1) A

Coercion relating to allocations of duties etc. 52 A

Coercion relating to superannuation 53 A

Coercion in relation to making, varying, terminating etc. enterprise agreements 54 A

Taking action against a building employer due to coverage by particular instruments 55 A

Hindering or obstructing authorised officers 78 A

Failure to provide Building Code compliance report within specified period 35(2) B

Failure to provide name and address of authorised officer 76(3) B

Failure to provide records or documents as required by an authorised officer’s notice 77(3) B

Failure to comply with compliance notice 99(7) B

Making certain payments relating to periods of industrial action 49 N/A172

Inspector or Federal Safety Officer failing to carry identification card 67 N/A173

Source: Building and Construction Industry (Improving Productivity) Bill 2013 [No. 2].

172. Paragraph 49(c) provides that if specified provisions of the Fair Work Act 2009 are contravened by a body corporate, the maximum penalty is 1,000 penalty units, compared to a maximum of 300 penalty units that would apply directly under the Fair Work Act. 173. Subclauses 67(5) and 69(5) respectively provide that the penalty is one penalty unit.

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Appendix B Table 3: definitions of industrial action

Building and Construction Industry Improvement Act 2005 (as enacted) Building and Construction Industry (Improving Productivity) Bill 2013

Fair Work Act 2009

36 Definitions

(1) In this Chapter, unless the contrary intention appears:

building industrial action means:

(a) the performance of building work in a manner different from that in which it is customarily performed, or the adoption of a practice in relation to building work, the result of which is a restriction or limitation on, or a delay in, the performance of the work, where:

(i) the terms and conditions of the work are prescribed, wholly or partly, by an industrial instrument or an order of an industrial body; or

(ii) the work is performed, or the practice is adopted, in connection with an industrial dispute (within the meaning of subsection (4)); or

(b) a ban, limitation or restriction on the performance of building work, or on acceptance of or offering for building work, in accordance with the terms and conditions prescribed by an industrial instrument or by an order of an industrial body; or

(c) a ban, limitation or restriction on the performance of building work, or on acceptance of or offering for building work, that is adopted in connection with an

7 Meaning of industrial action

(1) Industrial action is action of any of the following kinds:

(a) the performance of building work by an employee in a manner different from that in which it is customarily performed, or the adoption of a practice in relation to building work by an employee, the result of which is a restriction or limitation on, or a delay in, the performance of the work;

(b) a ban, limitation or restriction on the performance of building work by an employee or on the acceptance of or offering for building work by an employee;

(c) a failure or refusal:

(i) by employees to attend work, where that work is building work; or

(ii) to perform any building work at all by employees who attend work, where that work is building work;

(d) the lockout of employees from their work by their employer, where that work is building work.

Note: In Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v The Age Company Limited, PR946290, the Full Bench of the Australian Industrial Relations Commission considered the nature of industrial action and noted that action will not be industrial in character if it stands completely outside the area of disputation and bargaining.

(2) However, industrial action does not include the following:

19 Meaning of industrial action

(1) Industrial action means action of any of the following kinds:

(a) the performance of work by an employee in a manner different from that in which it is customarily performed, or the adoption of a practice in relation to work by an employee, the result of which is a restriction or limitation on, or a delay in, the performance of the work;

(b) a ban, limitation or restriction on the performance of work by an employee or on the acceptance of or offering for work by an employee;

(c) a failure or refusal by employees to attend for work or a failure or refusal to perform any work at all by employees who attend for work;

(d) the lockout of employees from their employment by the employer of the employees.

Note: In Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v The Age Company Limited, PR946290, the Full Bench of the Australian Industrial Relations Commission considered the nature of industrial action and noted that action will not be industrial in character if it stands completely outside the area of disputation and bargaining.

(2) However, industrial action does not include the following:

(a) action by employees that is authorised or agreed to by the employer of the employees;

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Building and Construction Industry Improvement Act 2005 (as enacted) Building and Construction Industry (Improving Productivity) Bill 2013

Fair Work Act 2009

industrial dispute (within the meaning of subsection (4)); or

(d) a failure or refusal by persons to attend for building work or a failure or refusal to perform any work at all by persons who attend for building work;

but does not include:

(e) action by employees that is authorised or agreed to, in advance and in writing, by the employer of the employees; or

(f) action by an employer that is authorised or agreed to, in advance and in writing, by or on behalf of employees of the employer; or

(g) action by an employee if:

(i) the action was based on a reasonable concern by the employee about an imminent risk to his or her health or safety; and

(ii) the employee did not unreasonably fail to comply with a direction of his or her employer to perform other available work, whether at the same or another workplace, that was safe for the employee to perform.

Note: See also subsection (2), which deals with the burden of proof of the exception in paragraph (g) of this definition.

excluded action means building industrial action that is protected action for the purposes of the Workplace Relations Act (as affected by Part 3 of this Chapter).

industrially-motivated means motivated by

(a) action by employees that is authorised or agreed to, in advance and in writing, by the employer of the employees;

(b) action by an employer that is authorised or agreed to, in advance and in writing, by, or on behalf of, employees of the employer;

(c) action by an employee if:

(i) the action was based on a reasonable concern of the employee about an imminent risk to his or her health or safety; and

(ii) the employee did not unreasonably fail to comply with a direction of his or her employer to perform other available work, whether at the same or another workplace, that was safe and appropriate for the employee to perform.

When there is a lockout

(3) There is a lockout of employees from their work by an employer if the employer prevents the employees from performing work under their contracts of employment without terminating those contracts.

(4) Whenever a person seeks to rely on paragraph (2)(c), the person has the burden of proving the paragraph applies.

(b) action by an employer that is authorised or agreed to by, or on behalf of, employees of the employer;

(c) action by an employee if:

(i) the action was based on a reasonable concern of the employee about an imminent risk to his or her health or safety; and

(ii) the employee did not unreasonably fail to comply with a direction of his or her employer to perform other available work, whether at the same or another workplace, that was safe and appropriate for the employee to perform.

(3) An employer locks out employees from their employment if the employer prevents the employees from performing work under their contracts of employment without terminating those contracts.

Note: In this section, employee and employer have their ordinary meanings (see section 11).

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Building and Construction Industry Improvement Act 2005 (as enacted) Building and Construction Industry (Improving Productivity) Bill 2013

Fair Work Act 2009

one or more of the following purposes, or by purposes that include one or more of the following purposes:

(a) supporting or advancing claims against an employer in respect of the employment of employees of that employer;

(b) supporting or advancing claims by an employer in respect of the employment of employees of that employer;

(c) advancing industrial objectives of an industrial association;

(d) disrupting the performance of work.

(4) In the definition of building industrial action in subsection (1):

industrial dispute means:

(a) an industrial dispute (including a threatened, impending or probable industrial dispute) that is about matters pertaining to the relationship between employers and employees; or

(b) a situation that is likely to give rise to an industrial dispute of the kind referred to in paragraph (a); or

(c) a dispute arising between 2 or more industrial associations, or within an industrial association, as to the rights, status or functions of members of the associations or association in relation to the employment of those members; or

(d) a dispute arising between employers and

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Building and Construction Industry Improvement Act 2005 (as enacted) Building and Construction Industry (Improving Productivity) Bill 2013

Fair Work Act 2009

employees, or between members of different industrial associations, as to the demarcation of functions of employees or classes of employees; or

(e) a dispute about the representation under an industrial law of the industrial interests of employees by an industrial association of employees.

Source: Building and Construction Industry Improvement Act 2005 (as made), Building and Construction Industry (Improving Productivity) Bill 2013 and the Fair Work Act 2009.

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Appendix C Table 4: Royal Commission into Trade Union Governance and Corruption recommendations relevant to the Bill

174. J Heydon AC QC, ‘Vol. 5: law reform and policy’, Final report of the Royal Commission into Trade Union Governance and Corruption, op. cit., p. 458.

Recommendation Does the Bill, as drafted, fulfil the

recommendation?

Recommendation 61:

There should continue to be a building and construction industry regulator, separate from the Office of the Fair Work Ombudsman, with the role of investigating and enforcing the Fair Work Act 2009 (Cth) and other relevant industrial laws in connection with building industry participants.

 The recommendation is fulfilled.

 Under clause 15(1) there is to be an Australian Building and Construction Commissioner.

 Clause 29 proposes to establish the ‘Australian Building and Construction Commission’ the new name for the Office of the Fair Work Building Industry Inspectorate (established by section 26J of the FWBI Act).

 The Commissioner’s functions (outlined in clause 16) include the enforcement of ‘designated building laws’, which includes the FWA.

Recommendation 62:

Legislation be enacted conferring the building and construction industry regulator with compulsory investigatory and information gathering powers equivalent to those possessed by other civil regulators. The powers set out in the Building and Construction Industry (Improving Productivity) Bill 2013 (Cth) appear appropriate in this regard.

 The recommendation is fulfilled.

 The proposed coercive investigatory powers are set out in proposed Chapter 7 of the Bill.

 The powers are comparable to other civil regulators, for example:

- under clause 61, the Commissioner can give ‘examination notices’ requiring a person to give information, produce documents, or answer questions. Information may be required to be on oath and

- clause 62 provides that the maximum penalty for failing to comply with an examination notice is imprisonment for six months.

Recommendation 63:

There should be oversight by the Commonwealth Ombudsman of the powers exercised by the building and construction regulator in the manner provided for in the Building and Construction Industry (Improving Productivity) Bill 2013 (Cth).

The recommendation is fulfilled, as the recommendation directly refers to the Bill as originally introduced, which is identical to the current Bill.

Recommendation 64:

Consideration be given to redrafting the use/derivative use immunity provisions in clauses 102 and 104 of the Building and Construction Industry (Improving Productivity) Bill 2013 (Cth) to provide protections equivalent to those available in relation to the powers exercised by ASIC.

 The recommendation is not fulfilled.

 The RCTUGC suggested that immunity should apply only to the recipient of the individual notice, and only to answers or information given under compulsion, not to documents obtained or created when the recipient of notice was under no compulsion.174

 As discussed in this digest, subclause 102(2)

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175. Clause 5.

provides both use/derivative use immunity to (a) information, answers and documents produced, and (b) any information obtained as direct or indirect consequence of giving the information, answer, or document produced under an examination notice.

 A person does not have to first claim privilege.

 Under clause 104, information, documents or things obtained as direct or indirect consequence of inspecting or copying documents in a person’s possession during an inspection by an authorised officer (under subclause 74(1)) are not admissible in evidence in criminal proceedings.

 Section 68 of the Australian Securities and Investments Commission Act 2001 provides that use immunity is limited to the provision of the information, signing a record and claiming the privilege. No derivate use immunity is available.

Recommendation 65:

The building and construction industry regulator continue to investigate and enforce the Fair Work Act 2009 (Cth) and other existing designated building laws. The power of the building and construction industry regulator to commence and maintain enforcement proceedings should not be constrained according to whether any other proceedings in respect of the same conduct have been settled. Accordingly, ss 73 and 73A of the Fair Work (Building Industry) Act 2012 (Cth) should be repealed.

 The Bill fulfils this recommendation.

 Currently, under sections 73-73A of the FWBI Act, the Director is precluded from commencing or continuing proceedings where the parties to the proceedings (ordinarily, employees and employers or organisations) have settled their claims in the proceedings.

 The Bill contains no provisions akin to subsections 73-73A relating to commencement or continuing of proceedings where parties have settled their claims, or discontinued proceedings.

Recommendation 66:

The Fair Work Act 2009 (Cth) be amended:

(a) to increase the maximum penalties for contraventions of ss 343(1), 348 and 355 (coercion) and ss 417(1) and 421(1) (prohibited industrial action) to 1,000 penalty units for a contravention by a body corporate and 200 penalty units otherwise; and

(b) to provide that picketing by employees or employee associations is ‘industrial action’, and to deal specifically with the consequences of industrially motivated pickets.

 The Bill partially fulfils these recommendations, as it:

- applies the proposed changes to the building and construction industry, but

- not other sectors of the economy (as it does not amend the FWA).

 The Bill provides that civil remedy provisions are classified as either ‘Grade A’ or ‘Grade B’.175

 The maximum penalty for a ‘Grade A’ contravention is 1,000 penalty units for a body corporate, and otherwise 200 penalty units.

 The maximum penalty for a ‘Grade B’ contravention is 100 penalty units for a body corporate, and otherwise 20 penalty units.

Coercion

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Source: As per footnotes in the table.

176. Clauses 52-54.

 The clauses of the Bill that deal with coercion are all specified as ‘Grade A’ civil penalty remedy provisions, and thus give effect to the recommendation (at least in relation to the building and construction industry).176

Prohibited Industrial Action

 Clause 46 of the Bill prohibits ‘unlawful industrial action’ and is specified as a ‘Grade A’ civil penalty provision, thus giving effect to the recommendation (at least in relation to the building and construction industry).

Picketing

 Clause 47 of the Bill prohibits ‘unlawful picketing’ and is specified as a ‘Grade A’ civil penalty provision.

 As result, the Bill gives effect to the recommendation (at least in relation to the building and construction industry), as the FWA does not cover picketing and the Bill does not seek to amend the FWA in the manner recommended.

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Appendix D Table 5: summary of existing and proposed coercive powers

Power FWBI Act / FWA Bill Differences Oversight mechanisms

Issuing examination notice requiring a person to:

 give information

 produce documents, or

 attend an interview to answer questions.

FWBI Act: sections 45-52.

Failure to comply punishable by six months imprisonment: section 52.

Clause 61

Failure to comply punishable by six months imprisonment: clause 62.

Under FWBI Act:

 the Director must apply to a nominated AAT member to issue an examination notice.

 An examination notice is only issued by the AAT if the matters in ss 47(1) are satisfied (including that other methods of obtaining the information or evidence have been attempted and failed or are not appropriate: para 47(1)(d).

 Removes the privilege against self-incrimination, but provides both use and derivative use immunity: sections 53, 54.

Under the Bill:

 No pre-ante oversight of the issuing of examination notices by the AAT (ABC Commissioner can issue them: clause 61).

 No requirement that other methods of obtaining the information or evidence have been attempted and failed prior to issuing examination notice.177

Under the FWBI Act:

 AAT has oversight (as detailed previously).

 Commonwealth Ombudsman must be notified each time an examination notice is issued: section 49.

 Commonwealth Ombudsman must be provided with a video of the examination, a transcript and a report for the Ombudsman’s review: section 54A.

 Commonwealth Ombudsman to prepare annual reports for the Parliament: subsection 54A(6).

 Commonwealth Ombudsman can also prepare any other reports it considers appropriate: subsection 54A(7).

Under the Bill:

 Commonwealth Ombudsman must be notified each time an examination notice is issued:

177. However, as noted by the Administrative Review Council, agencies generally ‘exercise their coercive information-gathering powers only after careful assessment of the need to do so, and this includes consideration of alternative ways of obtaining the desired information’: Administrative Review Council, ‘The coercive information-gathering powers of government agencies’, report, 48, May 2008, p. 13. There is no legal requirement that the ABC Commissioner must adopt the same approach.

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 Removes the privilege against self-incrimination, but provides both use and derivative use immunity: proposed sections 102-104.

clause 64.

 Commonwealth Ombudsman must be provided with a video of the examination, a transcript and a report for the Ombudsman’s review: clause 65.

 Commonwealth Ombudsman to prepare annual reports for the Parliament: subclause 65(6).

 Commonwealth Ombudsman can also prepare any other reports it considers appropriate: subclause 65(7).

FWBI Inspectors

Monitor compliance with the Building Code. FWBI Act, section 59E

Clause 70 No substantive difference. Under the FWBI Act and FWA:

 Powers can only be exercised during:

- working hours, or

- at other times if the inspector ‘reasonably believes’ it is ‘necessary to do so’ for compliance purposes.178

 Compliance notices can be challenged in the federal court.179

Under the Bill:

 Powers can only be exercised

Can enter premises (without force) FWA, section 708 Clause 72 The powers proposed by the Bill are

broader than those currently provided by the FWA.

The current section allows an authorised officer to enter a range of premises where the officer reasonably believes that building work is (or has been) performed on the premises or records or documents relevant to a compliance purpose are on a business premises, or accessible from it. Current subsection 708(2) prevents entry to residential premises unless the officer

178. Fair Work Act 2009, section 707. 179. Fair Work Act 2009, section 717.

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reasonably believes that building work is being performed on the premises.

In contrast, clause 72 applies more broadly. In addition to the grounds for entering premises noted above, it also provides that an authorised officer may enter premises if they reasonably believe that a breach by a building industry participant of the Bill, a designated building law or the Building Code has occurred, is occurring or is likely to occur. In addition, in relation to business premises, clause 72 provides that entry without force is also authorised where an authorised officer reasonably believes that a person who ordinarily performs work or conducts business at the premises has information relevant to compliance purposes. Like the current section of the FWA, clause 72 also prevents entry to residential premises. In addition, it also prevents entry to business premises on the grounds that a person who ordinarily performs work or conducts business at the premises has information relevant to compliance purposes unless the authorised officer reasonably believes that the person concerned is at those premises.

during:

- working hours, or

- at other times if the inspector ‘reasonably believes’ it is ‘necessary to do so’ for compliance purposes: clause 71.

 Compliance notices can be challenged in a federal, state or territory court: clause 100.

In relation to providing information or documents to an inspector under the powers listed above, the privilege against self-incrimination is removed, but provides both use and derivative use immunity: FWA, sections 713, 713A, and clauses 102-104.

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Specific powers180

 inspect any work, process or object

 interview any person

 require a person to tell the inspector who has custody of, or access to, a record or document

 require a person who has the custody of, or access to, a record or document to produce the record or document to the inspector either while the inspector is on the premises, or within a specified period

 inspect, and make copies of, any record or document that: (i) is kept on the premises; or (ii) is accessible from a computer that is kept on the premises

 take samples of any goods or substances in accordance with any procedures prescribed by the regulations/ rules.

FWA, section 709 Clause 74 No substantive differences.

180. These powers are provided by sections 59C and 59E of the Fair Work (Building Industry) Act 2012, which refers to parts of the Fair Work Act 2009.

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Require a person whom the inspector reasonably believes has contravened a civil penalty provision to tell the inspector their name and address.

FWA, section 711 Clause 76 No substantive difference.

Require a person, by notice, to produce a record or document to the inspector.

FWA, section 712 Clause 77 No substantive difference.

Can keep a document or record produced FWA, section 714 Clause 79 No substantive difference.

Issue compliance notice. FWA, section 716 Clause 99 No substantive difference.

Accept enforceable undertakings

FWA, section 715 Clause 98 No substantive difference.

Federal Safety Officers (see important information in the footnote)181

Monitor compliance with the Building Code and accreditation scheme

FWBI Act, subsections 62(1), 63(1)

Clause 70 Under the Bill, Federal Safety Officers can only monitor compliance with accreditation scheme only.

Under the FWBI Act and FWA:

 Powers can only be exercised during:

- working hours, or

- at other times if the Officer ‘reasonably believes’ it is ‘necessary to do so’ for compliance purposes: FWBI Act, subsections 62(2), 63(2).

Under the Bill:

Enter premises (without force) FWBI Act, subsections 62(3),

63(3)

Clause 72 No substantive difference, but can only be exercised in relation to monitoring compliance with accreditation scheme (hence narrower scope of application).

Specific powers:

 inspect any work, process or object

FWBI Act, subsections 62(5), 63(5)

Clause 74 No substantive differences in the powers, but they can be exercised in relation to monitoring compliance with accreditation scheme (hence narrower scope of

181. Under both the FWBI Act and the Bill, Federal Safety Officers effectively have the same powers as FWBI Inspectors. However, under the Bill Federal Safety Officers can only exercise those powers in relation to monitoring compliance with the accreditation scheme (under the FWBI they could monitor compliance with the Building Code). For completeness the table sets out the powers again.

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 interview any person

 require a person who has the custody of, or access to, a record or document to produce the record or document to the inspector either while the inspector is on the premises, or within a specified period

 inspect, and make copies of, any record or document that: (i) is kept on the premises; or (ii) is accessible from a computer that is kept on the premises

 take samples of any goods or substances in accordance with any procedures prescribed by the regulations/ rules.

application).  Powers can only be exercised

during:

- working hours, or

- at other times if the Officer ‘reasonably believes’ it is ‘necessary to do so’ for compliance purposes: clause 71.

Require a person, by notice, to produce a record or document to the inspector

FWBI Act, subsections 62(6), 63(6).

Clause 77 No substantive difference in the power, but can only be exercised in relation to monitoring compliance with accreditation scheme (hence narrower scope of application).

Can keep a document or record produced

FWBI Act, subsections 62(7), 63(7).

Clause 79 No substantive difference in the power, but can only be exercised in relation to monitoring compliance with accreditation scheme (hence narrower scope of application).

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