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Tuesday, 9 August 2005
Page: 87


Mr STEPHEN SMITH (7:50 PM) —The Building and Construction Industry Improvement Bill 2005 and the Building and Construction Industry Improvement (Consequential and Transitional) Bill 2005 were introduced in part by replicating, with some modifications, four of the chapters of the 2003 substantive bill. Labor opposed the Building and Construction Industry Improvement Bill 2003 and is also opposed to the Building and Construction Industry Improvement Bill 2005. This bill, like its predecessor, is a flawed piece of legislation. It will not assist in the satisfactory resolution of industrial issues in the building and construction industry. It will in fact have an opposite and deleterious effect. The bill also potentially endangers the health and safety of employees in the building and construction industry by adding unnecessary complexity to the resolution of occupational health and safety issues.

As a general proposition, Labor is opposed to creating specific jurisdictions for specific industries. This bill changes the rules retrospectively and in a way which substantially penalises employees, unions and employers currently participating in making enterprise bargains in a legal and reasonable way. Again, as a general proposition, Labor is opposed to retrospective legislation, particularly where that imposes retrospective penalties. As well, the bill has defined the construction industry so broadly that employers and employees who have never previously considered themselves as part of the industry are covered by the provisions of the bill and thereby exposed to prosecution and penalties for participating in what they regard as, and what are currently, legal bargaining activities. The bill places further restrictions upon employees and their unions in exercising their right to strike and, as a consequence, brings Australia in breach of ILO convention 87 even more so than is already the case. In addition, the bill overrides state jurisdictions in a way which creates new complexities rather than provides simplicity. As a result, the above provisions of this bill combine to create massive uncertainty in one of Australia’s largest and most important industries. As a consequence, Labor is opposed to the bill.

In passing, I note that amendments have been circulated. Those amendments run to over 30 pages. I, of course, have had no opportunity to examine the substance or the detail of those amendments. No notice of them was given and no courtesy was extended in a professional way from the Minister for Employment and Workplace Relations or his office. On a day like today, when the Howard government gets all power under the sun with control of the Senate, we have seen another example in the course of the day of the arrogance which occurs when someone gets too close to the sun. I suspect that many of the amendments circulated were contained in the 2003 bill, and with a bit of luck I will have the opportunity overnight to consider the detail thereof and make some comments tomorrow in the consideration in detail stage.

The Minister for Employment and Workplace Relations introduced the Building and Construction Industry Improvement Bill 2005 and the Building and Construction Industry Improvement (Consequential and Transitional) Bill 2005, which we are now debating concurrently, into the House on 9 March 2005. When the legislation was introduced into the House, the minister announced that it would operate retrospectively from 9 March 2005. The Building and Construction Industry Improvement Bill 2005 reintroduces in part the enforcement provisions contained in the government’s former Building and Construction Industry Improvement Bill 2003. That 2003 bill was passed by the House of Representatives on 4 December 2003. It was referred to the Senate Employment, Workplace Relations and Education References Committee, which reported on 21 June 2004. The 2003 bill lapsed when parliament was prorogued for the 2004 federal election.

The Building and Construction Industry Improvement Bill 2003 was developed as the government’s legislative response to the Cole Royal Commission into the Building and Construction Industry. The Building and Construction Industry Improvement (Consequential and Transitional) Bill 2005 provides for machinery additions related to the Building and Construction Industry Improvement Bill 2005. Nine chapters of the 2003 bill have not been re-presented, together with some content of the remaining four chapters, thereby creating this substantive 2005 bill. As I mentioned, I suspect that some of the volume of amendments which have been circulated in the last hour or so will contain further provisions from the 2003 bill.

The bills as presented were never expressed to reintroduce the government’s complete legislative response to the Cole royal commission. It was always expected that that would occur at a later date, and that later date has potentially arrived. The Howard government’s primary motivation in bringing forward this version of the bill is to stymie attempts to negotiate new enterprise agreements prior to the expiry of the current round of agreements in the building and construction industry in October 2005.

The four chapters of the earlier 2003 bill included in this 2005 version of the bill are: chapter 1—‘Preliminary’, which defines the coverage of the bill and sets out a series of key definitions including the new retrospective date of effect; chapter 6—‘Industrial action’, which clarifies when industrial action is lawful and when it is not; chapter 12—‘Enforcement’, which significantly increases penalties for unlawful industrial action and provides immediate access to courts to pursue damages; and chapter 13—‘Miscellaneous’, which provides for various courts to be conferred with the jurisdiction to deal with matters relating to the Building and Construction Industry Improvement Bill 2005.

The bill introduces the following measures to apply retrospectively from 9 March 2005. Firstly, the bill increases the maximum penalties to $110,000 for a body corporate and $22,000 for an individual where unlawful industrial action is taken. Secondly, the bill makes certain forms of industrial action unlawful and provides access to sanctions against unlawful industrial action in the form of injunctions, pecuniary penalties and compensation for loss. Thirdly, in particular the bill makes industrial action taken by unions prior to the nominal expiry date of certified agreements unprotected and as a consequence unlawful. Fourthly, if a union takes industrial action in support of its negotiations, it may be exposed retrospectively to fines of up to $110,000 and uncapped damages; individuals may face fines of up to $22,000. This is expressly intended to severely limit the ability to negotiate bargaining outcomes. And, finally, the bill shifts the onus onto employees to prove that a reasonable concern exists where action is taken based on an imminent occupational health and safety risk. This is a significant safety issue. The building and construction industry is one which is particularly hazardous. Over the last 10 years, for example, there has been an average of 50 workplace fatalities each year in the industry. This bill, by imposing financial penalties upon those employees who cease to work in what they regard as an unsafe environment, potentially puts the health and safety of employees at risk.

The legislation also encroaches on state industrial relations jurisdiction. The unlawful industrial action provisions will apply to industrial action in the industry taken by, or that adversely affects, a constitutional corporation and will override state industrial relations regulation. The Howard government has also indicated that it will consider on a case-by-case basis intervening in the public interest where employers use existing mechanisms under the Workplace Relations Act 1996. This is an unprecedented level of government intervention in support of employers in bargaining negotiations at the industry level.

Turning to provisions of the 2005 bill, the bill introduces specific measures regarding unlawful industrial action in the construction industry and replicates the unlawful industrial action and ancillary provisions of the 2003 bill. Chapter 6 renders certain kinds of industrial action unlawful and amends what may be protected action for the purposes of the Workplace Relations Act 1996. ‘Unlawful action’ is defined as all constitutionally-connected, industrially-motivated building industrial action that is not ‘excluded action’. Only protected action under the Workplace Relations Act 1996 as amended by this bill and Australian workplace agreements industrial action will be ‘excluded action’. ‘Excluded action’ also encompasses action by an employee based on a reasonable concern about an imminent occupational health and safety risk where the employee does not unreasonably fail to comply with an employer’s direction to perform other available work. However, the onus is on the employee to prove the action is based on a reasonable concern.

Industrial action is not protected where the employment of employees is subject to a certified agreement, is taken to support or advance a claim and is taken prior to the nominal expiry date of an agreement. The unlawful industrial action provisions will apply broadly across the industry and extend to action in relation to industrial disputes, awards or agreements under the Workplace Relations Act 1996. The provisions will apply to industrial action in the industry taken by, or that which adversely affects, a constitutional corporation and thus will override state industrial relations regulation. Civil penalties of up to $110,000 for organisations and up to $22,000 for individuals will apply. In addition, parties who take unlawful action may be ordered by a court to pay substantial uncapped compensation to any parties affected by the unlawful industrial action.

The bill also provides for increased penalties for contravention of the strike pay provisions of part VIIIA of the Workplace Relations Act 1996. Actions against offending parties will be able to be brought by inspectors under the Workplace Relations Act including officers of the Building Industry Taskforce and the Australian Building and Construction Commission, once that is subsequently established by the government.

Under sections 226 to 229 of the bill, regulations may be made that prescribe other persons as eligible to make an application for a breach. This potentially enables an expanded class of persons external to the matter to seek to have penalties imposed even where the parties to the matter do not consider this a useful or beneficial course of action to take. As the minister made clear in his second reading speech, the provisions will allow for substantial uncapped compensation and the bill does not rely on an affected party to enforce the law. The bill will also confer additional jurisdiction on federal courts to hear matters under the act including the Federal Magistrates Court or state Supreme, District or County courts, as the case may be. As with other aspects of the bill, these measures will apply retrospectively from the date of introduction, namely, 9 March 2005.

The Building and Construction Industry Improvement Bill 2005 was referred to the Senate Employment, Workplace Relations and Education Legislation Committee, which reported on 10 May 2005, some two months after introduction. The Master Builders Association and the Australian Industry Group, the AiG, the two most relevant employer associations in the industry, both made submissions supporting the bill. The AiG, however, called for a number of amendments to narrow the definition of building work and thus the application of the bill.

On the other hand, the New South Wales government opposed the bill on the following grounds: (1) that it is industry specific rather than having broad application; (2) it adds unnecessary complexity to the Australian industrial relations framework; (3) its provisions are punitive, heavy-handed and unbalanced; (4) it promotes a litigious, adversarial and costly approach to industrial relations which will hinder rather than assist good faith bargaining; (5) it breaches ILO conventions regarding the rights to organise, collectively bargain and freedom of association; and (6) it is retrospective with no demonstrated justification for the retrospectivity of the bill other than an attempt to prevent further enterprise bargaining negotiations.

The ACTU also opposed the bill. The ACTU summarised its reasons for opposition to the bill as follows:

  • The circumstances existing in the industry have not changed such that the view formed by the Senate References Committee in the majority report and the Democrats minority report that the entirety of the 2003 Bill be rejected should be reviewed.
  • The Bill seeks to put into effect a retrospective definition of unlawful industrial action.
  • The Bill constitutes an unbalanced approach to the building and construction industry.

The Australian Democrat senators’ minority report referred to their previous report on the Building Industry Improvement Bill 2003. In that report the Democrats argued against the need for specific industry legislation. The Democrats also questioned how, if one of the key findings of the Cole royal commission was that there was a weakness in current enforcement mechanisms, creating new workplace relations laws would resolve this problem. The Democrats’ minority report said:

We support one central proposition behind the Bills, that greater regulation and enforcement of workplace relations laws is necessary. We do not support the second central proposition behind the Bills, that industry specific legislation and sweeping new Workplace Relations Act 1996 provisions are necessary to achieve this aim.

The Democrat senators’ report also noted with concern the confusing nature of the definition of the building and construction industry in the bill. The Democrat senators also opposed the retrospectivity of the bill. As Democrat Senator Andrew Murray commented:

There are two elements of retrospectivity that the Democrats believe are important. The first is that there is the element of natural justice, where retrospective legislation offends against the principles of natural justice and trespasses upon the basic tenet of our legal system that those subject to the law are entitled to be treated according to what the law says at the relevant time and according to what the law means at the time, subject to courts interpretation. The second area is that of uncertainty, where retrospective legislation brings uncertainty to the environment in which the community and business operate.

The Democrat senators concluded that they would continue to argue that the problems in the industry and in other industries would be far better addressed by enforcement of existing law and the creation of a well-resourced independent national workplace relations regulator. Government senators commended the bill and urged that it be passed without amendment.

Labor senators also opposed the bill. One reason was the poorly drafted definition of the ‘building and construction industry’. As Labor senators noted in their report:

There are so many anomalies which result from the broad definition of the building industry that protracted litigation will be necessary to sort matters out.

Labor senators also noted that provisions of the bill overriding state legislation will cause uncertainty and confusion owing to the ‘piecemeal exclusion of state laws from the national industrial relations regime’. Labor senators agreed with the observations made by Democrat Senator Andrew Murray that the overwhelming majority of bills with retrospective provisions either have a beneficial effect, make technical amendments or relate to taxation measures. No such argument has been made out here to mitigate the bill’s retrospective effect.

The minister argues that the bill aims to promote respect for the rule of law in the building and construction industry. Yet this bill, if enacted, will compound Australia’s ongoing disrespect for international labour law. Australia has repeatedly reaffirmed its obligation as a member of the International Labour Organisation, the ILO, and its commitment to ensure that its domestic laws provide for labour standards consistent with internationally recognised labour principles. The ILO Committee of Experts has repeatedly found that the Workplace Relations Act 1996 contravenes fundamental ILO conventions on freedom of association and the right to collective bargaining.

The bill selectively and unfairly targets building industry workers and excludes them from basic and universally applicable labour standards. All employees should have the rights and protections afforded by international labour law, irrespective of the particular industry in which they work. The building and construction industry should not be exempt from compliance with the fundamental rights to collective bargaining and freedom of association that are embodied in the relevant ILO conventions. The bill breaches these fundamental rights by rendering virtually all industrial action in the building and construction industry unlawful industrial action and by further restricting what kinds of industrial action can be protected action for the purposes of the Workplace Relations Act 1996.

This is a poorly drafted, excessively punitive and unfair bill. Labor believes that this bill is divisive in its application and will not assist in the satisfactory resolution of industrial issues in the building and construction industry. As a general proposition, Labor believes and I believe that we should utilise the general jurisdiction of industrial relations law and not create industry-specific specialised jurisdiction. Secondly, we should not, as a general proposition, engage in retrospective legislation particularly when that applies retrospective penalties. Thirdly, the most essential element in terms of the resolution of industrial difficulties or industrial disputation is to seek to resolve these matters in a cooperative fashion, generally in a tripartite manner which comes from the cooperation between employers, employees and government.

Labor does not support unreasonable or unlawful conduct. However, Labor also does not support the creation of laws which will effectively prohibit the taking of industrial action as this is in contravention of the fundamental rights to collective bargaining and freedom of association as embodied in the relevant ILO conventions. The bill, if passed, will further exacerbate Australia’s industrial relations legislation contravention of these fundamental ILO conventions. This bill is politically motivated and has been designed to try and assist the government in its attempts to stymie the current round of enterprise agreement negotiations within the building and construction industry. The bill adds complexity to resolving occupational health and safety issues in the industry and thus potentially endangers employees.

The retrospectivity of this bill potentially substantially penalises employees, unions and employers currently participating in making enterprise bargains in a legal and reasonable way. The definition of the construction industry in this bill is so broad that employers and employees who have never previously considered themselves a part of the industry are captured and encompassed by this bill. Consequently, they will be exposed to prosecution and penalties for participating in what they believe is, and what is currently, legal bargaining activity. Substantial litigation will be necessary to accurately understand exactly what is encompassed by the definition. The bill overrides state jurisdictions, and creates a specific set of legislation for just one industry in such a way as to create complexity and confusion. The provisions of this bill combine to create massive uncertainty in one of the largest and most important industries in Australia.

A much better approach would have been to establish a tripartite building industry council charged with bringing about cultural change in the industry through cooperative measures. Labor believes that such a cooperative approach is far more likely to bring about real and lasting reform to the industry than the Howard government’s expensive and conflict driven approach. I underline Labor’s opposition to the legislation.