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Wednesday, 13 August 2003
Page: 18378

Mr McARTHUR (1:05 PM) —I am delighted to participate in this debate. I note my good friend the member for Hunter has not really stuck with the subject, which is the Workplace Relations Amendment (Compliance with Court and Tribunal Orders) Bill 2003. I note also that the preselectors of Hunter have now reconfirmed his preselection. I would have thought that he might have stuck with the bill because it might have enforced some of the rules and regulations of the Labor Party in the Hunter Valley, and that preselection might have been conducted in the normal branch-stacking manner in the Hunter. I congratulate the member on his preselection. I do not congratulate him on his contribution on this particular bill because he went into the normal rhetoric of attack on the workers and made no reference to the bill whatsoever throughout his 20-minute speech. Instead he made references to other matters not related to this bill.

This bill brings to account the rule of law under the Industrial Relations Commission and the Federal Court. Nobody opposite could challenge the particular set of philosophies that says this parliament should legislate to ensure that the rule of law is predominant and that the rulings of the Industrial Relations Commission have the backing of the Federal Court. In this case the minister is seeking amendments to the Workplace Relations Act so that financial penalties can be applied for noncompliance with the orders of the Australian Industrial Relations Commission.

The member for Hunter and others opposite proclaim the virtues of the Industrial Relations Commission, saying that it is the umpire, that it makes the decisions for both parties and that those decisions should be adhered to. But as I will refer to later, a number of those rulings and recommendations are flagrantly disregarded by unions and the union leadership.

The bill also talks about noncompliance with orders of the Federal Court and ensures that some of these orders will be able to be enforced. The legislation allows for the default disqualification of officers and employees of registered organisations if they do not comply with the orders, and they can also be fined. I make the point that this applies to both union officials and employees as well as employer organisations.

Some of those union officials who fail to comply with commission orders to cease industrial action will be subject to sections of this bill. With regard to orders to cease industrial action under section 127 of the Workplace Relations Act, this section has been a matter of considerable discussion in an attempt to ensure that orders of the Industrial Relations Commission are obeyed. This bill ensures that the Federal Court can enforce the orders under section 127 and make both employers and employees obey the industrial law as announced in the 1996 act.

Some employers, as we know, are reluctant to pursue their rights. We see this in the building industry—and I will refer to this again. Under this bill the union officials would be fined and in some cases prevented from holding office if they contravened the rules. It is interesting that there is evidence that some union officials have had these section 127 orders in their top drawer; in fact, they have made quite a point of having received these orders and flagrantly disregarded them—done nothing about them. This bill ensures that the rulings will be enforced and that the operations of the Industrial Relations Commission and the 1996 act will be improved. Small business owners do not have the industrial muscle to fight back when some of the union officials attack their small enterprises in conjunction with attacks on larger businesses. They feel very threatened and generally comply with industrial muscle rather than the rule of law.

I want to draw the attention of the House to the Cole royal commission into the building industry. If you look at some of the examples in the transcript it is interesting to see exactly what took place. We can see some of the backup for this bill there. I will read some of the transcript in order to support the minister and the government and the way in which this bill, in quite a sensible manner, is being introduced into the parliament to reinforce and support the current legislation. The part of the transcript I am about to read talks about a subcontractor. It says:

On 27 February, a Dexion subcontractor sought to deliver a pallet load of steel bolts and fittings to the QP2 site. He was prevented from entering the site by what was described as an official picket line, and the driver was told: “This is an official picket line. If you attempt to cross it, we will tip your—

it is colourful language—

... truck over.” The driver persisted. He said if he didn't drop off the load, he would get the sack. He asked to be able to make the single delivery, as it wouldn't take long. The leader of the picket line then said to him: “If you don't leave, the large man with the beard over there willclean you up.” As he said this, the person pointed at a tall bearded individual standing in a group of five ...

So there we have it in evidence: intimidation at its worst—as we know happens in the building industry. There it is on the public record. I again quote from the evidence:

Later that day, the picketers began hitting golf balls over the front fence of the site, one of which hit the side of the site office. Others were being hit over the carpark area, causing at least the risk of damage to the vehicles of persons working on the site.

On 10 March, Beach J, of the Victorian Supreme Court, granted an injunction requiring the three unions concerned, the CFMEU, AMWU, and CEPU, to refrain from directing and advising their members not to perform work in accordance with their contracts of employment, to refrain from taking part in any picket of the site or other business premises of the contractors. The unions were also ordered to recommend to their members that they perform work in accordance with their contract of employment or contracts of employment.

What could be more reasonable and sensible than that? Yet the transcript goes on to say:

Despite those orders and the injunction of Beach J, the picket line continued. It ceased formally to be an official picket line.

There we have it from the Cole royal commission: evidence of the sort of intimidation that goes on, particularly in Victoria, in the building industry. This legislation is an attempt to bring some law and order to building sites and to Australian workplaces. Under the legislation, a person who disobeys an order of a court or interferes with the process of the administration of justice will be in contempt of the court.

We had the interesting case back in 1986, as many members of this House would recall, of the AMIEU v. Mudginberri Station. That was a case in which the High Court in fact enforced sanctions for wilful disobedience of Federal Court orders. In that case, we had an industrial situation of the AMIEU—a meatworkers union—defying an abattoir operation in the Northern Territory. The important breakthrough there was that the court enforced legal sanctions against the union. Some of us will recall the importance of that case. The union could no longer bully and coerce employers and employees in the meat industry. The situation at the moment is that disobedience and coercion and other forms of intimidation still take place in the workplace, disregarding the outcome of Mudginberri and other similar cases where the force of law was brought to bear on industrial relations.

Justice Merkel in the year 2000 found the Australian Manufacturing Workers Union and the Electrical Trades Union guilty of contempt of court and of wilfully breaching orders. They exacerbated the breach by telling journalists of their intention to breach those orders. We have, on the one hand, the court enforcing the orders and, on the other hand, union leaders wilfully and positively telling journalists and others that they would defy those orders.

The Australian Industry Group did not seek to enforce the payment of the fine by the AMWU secretary as the fine of $20,000 would go into consolidated revenue—that was their response. I guess they were concerned that if that fine went ahead they would be the subject of intimidation. The Attorney-General did not consider it his duty to enforce the finding as it was considered the enforcement of a private right. Again, we have a grey area of the law as to the enforcement of the workplace industrial relations legislation regarding activities at the workplace. Justice Merkel went on to note that the refusal of a duty to enforce could raise the issue of obstructing the course of justice and that if such refusals to enforce continued then the court should make provisions for the enforcement of its own penalty for contempt.

The courts were in some difficulty. On the one hand, there was the Federal Court enforcing the industrial relations law of the Industrial Relations Commission as they saw it. In an order for the CFMEU to return to work the full court said that the union's conduct went beyond the failure to notify the members of the order to immediately cease strike action and found that the union had engaged in `calculated and devious attempts to disguise any knowledge of the order's existence'. So we have this grey area of what constitutes legal and industrial activity. On this occasion the CFMEU was penalised with a fine of $120,000 plus costs. Obviously, the court took the view that there was industrial activity contrary to the spirit and the law of the Industrial Relations Act. Section 306 provides for a penalty of $110,000 for an organisation and $2,200 for an individual. The act has a number of provisions to ensure that the legislation can be implemented and that the fines are fairly severe. However, it is difficult to implement it and this bill is an attempt to bring about law and order in the workplace.

In talking about applications to the minister, the bill is fairly specific in saying that the disqualification in the present bill is automatic but is then subject to appeal. In deciding an application for leave to hold office the Federal Court must have regard to:

(a) the nature of the contravention; and

(b) the circumstances of, and the nature of the person's involvement in, the contravention; and

(c) the general character of the person; and

(d) the fitness of the person to be involved in the management of organisations, having regard to the contravention ...

We have some safeguards in place for those who wish to pursue the activity under the court order. Those opposite, who might wish to say that this is an attack on the workers, can see that the government and the minister have been very reasonable in trying to redress this sensitive and difficult problem of ensuring that the rule of law applies in the workplace. The minister is saying that the government will be more active in taking legal action and pursuing penalties. Even the member opposite would have to agree that, if the employers and employees incur a penalty, they should pay it if legal action is required on both sides—the employer's and the employee's. The member for Throsby, who has had a lot of experience in that and whose views I have very high regard for, would understand these arguments on both sides of the industrial fence.

The minister is suggesting that some of these matters will be referred to the Director of Public Prosecutions, including contempt of the commission if that does arise. If members opposite were thoughtful and understanding and had a desire to look after the `umpire'—which I am sure the member for Throsby will refer to, as she has done over a number of years—they would see that the technical details of the bill allow the umpire to have the provisions and the capacity to deal with both parties: employers and employees.

I would like to run through the report of the Cole Royal Commission into the Building and Construction Industry. A number of the issues raised by that commission are interesting. The member for Throsby would understand a number of these issues. She comes from New South Wales where there is a different culture on the work sites up there, but down in Melbourne it is a bit different; it is tougher on some of those work sites. The Cole commission found a difference in culture there as compared to that in Western Australia. The member for Canning indicated what the situation was in Western Australia.

I wish to comment on a number of Cole commission findings. Under the heading `Findings regarding conduct and practices' it is stated:

In the building and construction industry through-out Australia, there is:

(a) widespread disregard or breach of enterprise bargaining provisions of the Workplace Relations Act 1996 (C'wth)

that is the initial finding of the commission—

(b) widespread disregard of, or breach of, the freedom of association provisions of the Workplace Relations Act 1996 (C'wth)

that means: no ticket, no start; if you go on a building site in Victoria, New South Wales, Brisbane or Perth you have to have a building union ticket or you will not be allowed on the site—

(c) widespread departure from the proper standards of occupational health and safety—

I agree with that, but I will make some comments on that later—

(d) widespread requirement by head contractors for subcontractors to have union-endorsed enterprise bargaining agreements (EBAs) before being permitted to commence work on major projects in State capital central business districts and other major regional centres ...

If you work as a contractor in the CBD in Melbourne or Sydney you have to have all those union tickets signed up. Your men have to be paid up and there will be a show of tickets. You cannot be a normal independent contractor without being a member of the union. According to the commission there is also:

(e) widespread requirement for employees of subcontractors to become members of unions in association with their employer obtaining a union-endorsed enterprise bargaining agreement—

there is a coercive special agreement between the employer and the subcontractors in relation to union membership—

(f) widespread requirement to employ union-nominated persons in critical positions on building projects—

we know that in a practical sense people who spend most of their time on big projects can be absolutely critical to the failure of that project in meeting budget standards and being on time—

(g) widespread disregard of the terms of enterprise bargaining agreements once entered into—

we have very good evidence from the Cole royal commission that, once bargaining agreements have been entered into, they can be torn up halfway through the job and new claims put forward—

(h) widespread application of, and surrender to, inappropriate industrial pressure—

we know from the headlines the amount of pressure that can be applied to some of these big projects, for instance, the MCG is now looking for completion schedules and is under considerable pressure from the industrial activity of certain unions—

(j) widespread making of, and receipt of, inappropriate payments—

I accept that the member for Throsby will say that the employers also took part in such payments, and I agree with that; the royal commission identified those employers who took part in inappropriate payments and were in collusion with union leadership—

(k) unlawful strikes and threats of unlawful strikes—

there we have it: unlawful strikes and the threat of unlawful strikes—and in some cases, the threat is more damaging than the actual strike—

(l) threatening and intimidatory conduct ...

As we talked about in the outline of this bill, that conduct or intimidation in the building industry is very hard to identify. The evidence I read out earlier indicates what can happen. Again, identifying intimidatory conduct on the picket line and bringing it before a court of law can be a very hard thing to do. The commission also found there is:

(m) underpayment of employees' entitlements—

I accept that point in relation to employers doing that to the detriment of the employees—

(n) disregard of contractual obligations;

(o) disregard of National and State codes of practice in the building and construction industry;

(p) disregard of, or breach of, strike pay provis-ions of the Workplace Relations Act 1996 (C'wth);

(q) disregard of, or breach of, the right of entry provision of the Workplace Relations Act 1996 (C'wth);

(r) disregard of Australian Industrial Relations Commission (AIRC) and court orders ...

That last point is a key point which this bill tries to address, because court orders and Industrial Relations Commission rulings made to bring about industrial peace between employers and employees on the work site have been totally disregarded in the building industry to a large degree. The commission also found there is:

(s) disregard by senior union officials of unlawful or inappropriate acts by inferior union officials;

(t) reluctance of employers to use legal remedies available to them—

employers are reluctant to go to a court to participate in legal activity and legal sanctions because of the cost and the implicit intimidation of senior contractors—

(u) absence of adequate security of payment for subcontractors—

I accept the view that many subcontractors have been threatened, have not been paid and have been sorely upset by the lack of payment in a very difficult industry—

(v) avoidance and evasion of taxation obligations—

this problem is well known in the building industry and on the waterfront—

(w) inflexibility in workplace arrangements;

(x) endeavours by unions, particularly the Construction, Forestry, Mining and Energy Union (CFMEU) to regulate the industry—

and finally—

(y) disregard the rule of law.

(Time expired)