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Wednesday, 10 August 2005
Page: 113

Mr SERCOMBE (5:26 PM) —The speech you have just heard from the member for Hasluck—the harangue—is typical of the extremist approach that members of the government take to industrial relations considerations. It is the sort of mentality reflected in the Prime Minister’s comments some time back about ‘stabbing them in the stomach’. It reflects the almost obsessive, vile and vitriolic set of attitudes and is quite counterproductive and stupid in contemporary Australia. What we get as a substitute for debate are personalised attacks on people like Kevin Reynolds who, despite extraordinarily expensive royal commissions and other attempts to attack him, continues to enjoy the confidence of his membership in Western Australia.

This sort of approach also seems to totally ignore the reality that Australia in recent years has been undergoing an extraordinary construction boom, which the government pretends to take some credit for. We still have these tales of doom and extreme views about the need for change in the building industry despite the fact that the building industry has been booming over recent years.

As I said, the Building and Construction Industry Improvement Bill 2005 and the Building and Construction Industry Improvement (Consequential and Transitional) Bill 2005 are part of an ideological crusade on the government’s part. It is an extreme crusade that is all about removing protection from workers not just in the building industry but in a whole range of industries. In fact, it is attempting to create a union free workplace. In some respects it is part of the forthcoming workplace relations package, which will include a whole variety of measures. It will abolish protections from unfair dismissal for four million workers. It will allow employers to put workers on individual contracts that cut take-home pay and reduce the employment conditions to only five minimum standards. Workers who refuse to sign such agreements face the prospect of being sacked.

The package will include changes to the way minimum wages are set to make them lower. It will effectively abolish the award safety net and will, as I said, replace it with just five conditions. Many workers will lose conditions like weekend, shift and public holiday rates, overtime, redundancy pay, and allowances for casual loadings.

Mr Cadman —That is wrong, and you know it is wrong.

Mr SERCOMBE —Well, get up and give some guarantees that it is wrong. This legislation will involve keeping unions out of workplaces to reduce the capacity of workers to bargain collectively and it will take away the powers of an independent industrial relations commission. This bill is part of the broad attack by the government on existing industrial relations practices. In some respects it is even more extreme. What has brought this legislation forward is the short-term political objective and fears that workers will achieve favourable conditions in advance of the government being able to ram their package through the Senate. In this process the government has created extraordinarily flawed legislation—and I will deal with some of that in a moment.

I was interested in the comment of the previous speaker that he is a great believer in the rule of law. There are some aspects of this bill that I believe ought to be seriously questioned in terms of what we Australians would regard as acceptable practices under the rule of law. The Financial Review talked about this particular bill in an article on 10 June. Among other things, the article says:

Multiplex is one of a breakaway group of builders—along with Baulderstone Hornibrook, Bovis, Lend Lease, Mirvac, ProBuild and LU Simon—that have negotiated a draft pattern agreement with the Victorian branch of the CFMEU. The government wants builders to delay negotiating new deals until they expire in October. The agreements would then be governed by the government’s new industrial relations legislation.

But builders negotiating with the CFMEU argue that they have work worth hundreds of millions of dollars under way and that they face the prospect of industrial action if they hold off signing new workplace deals until they expire in October.

Multiplex spokesman Mathew Chandler said yesterday that the company was “striking a deal with Multiplex employees …”

The government has warned that builders will be excluded from federally funded construction work unless they have workplace agreements that comply with the national construction code and guidelines.

I am quite familiar with the standover tactics the Commonwealth government has been applying in the construction industry. In my part of Melbourne the building of a project that is very important for the security of Australians—a new postal, Customs and quarantine facility at Tullamarine Airport—was delayed for an inordinate amount of time because of the government’s objection to quite legitimate agreements that were being negotiated between construction companies and the unions. It is a reflection of the government’s ideological zeal on this matter that it was prepared to put the safety of Australians at risk by delaying an important project simply on the ideological ground that it was not happy about the context of the agreement, despite the fact that very major construction companies in Victoria were perfectly content with the agreement; they freely entered into it. So important infrastructure projects—important skills development projects that will increase the future productivity of Australians—are being held up because of this particular obsession of the government.

In a submission to the Senate inquiry into this bill, which was held some time back, the ACTU said:

Right now, the CFMEU are engaging in negotiations to try and arrive at enterprise agreements which will roll over existing agreements for another three years. This is a completely legitimate thing to do; there is no evidence that that is being done in an unlawful way. In fact, if they are successful in doing that—and the indications are that they will be—

and as the Financial Review article indicated, they have been—

it will add stability and security to the construction industry. But what it will also do is place those employers and those workers in settled industrial relations which will go far beyond August of this year, at which time this government will introduce into this parliament what in our view would be radical set of industrial laws, the essence of which is inciting and encouraging employers to exploit their work force.

Indeed, I think that is an accurate assessment of what has been afoot. What does this particular legislation provide? It seeks to stymie the negotiation of industrial agreements prior to expiry of the current round, as I said, by providing that industrial action is not protected where action is taken to advance claims prior to the nominal expiry date of agreements. The agreement provides penalties that will apply to a constitutional corporation, where it is involved, and will purport to override state legislation in this respect. The legislation—and I believe this is important in considering the rule of law aspects of this—will be retrospective to 9 March 2005. It relies on an extraordinarily wide definition of what is covered by the building and construction industry and, frankly, adds massively to the complexity of the industrial relations system.

I would like a deal with a couple of aspects of those provisions. In their report to the Senate, the Democrats—with whom I do not always agree; they have in the past tended to support the government a little too often, much to their cost—quite correctly deal with the question of retrospectivity, which is a crucial one. They say:

The Democrats are concerned that the bill seeks to put into effect a retrospective definition of unlawful action. There are four main types of retrospectivity, the first being practical and necessary, the next two being positive and the last negative. It is often practical or necessary for some tax law to take effect from the date of announcement, subsequently confirmed by legislation—

I think we would all agree with that—

remedial retrospectivity that corrects mistakes or that is technical is usually beneficial; retrospectivity that is benign or beneficial to individuals or entities should be supported; retrospectivity which is adverse to those affected should generally be opposed.

As a general principle the Democrats do not support the use of retrospective legislation that acts to overturn existing contractual arrangements—

and that is what this legislation is seeking to do—

makes previously lawful activity unlawful—

and once again, this legislation is purporting to do that—

or that acts to the detriment of individuals or organisations. This is not a party but a cross-party principle. It has long been a Senate and a parliamentary principle not to approve retrospectivity except in instances of fraud, illegality or exceptional circumstances.

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 the court’s interpretation. The second area is that of uncertainty, where retrospective legislation brings uncertainty to the environment in which the community and business operate.

I do not think there is any doubt that on all those counts this particular legislation is indeed seriously flawed and in fact undermines some very important principles as to the rule of law. I think Australians are entitled to be concerned about this. A second fundamental objection to this legislation arises from its definitions, particularly as to what is building work. A submission to the Senate inquiry that I have been referring to said as follows:


these are members of a union that work in the rail industry, the transport industry—

involved in infrastructure maintenance work include fettlers, track repair machine operators, gang protectors, track inspectors and gangers. It would come as a great surprise to them to suddenly discover that, by Federal Government fiat, they have been deemed, at least for the purposes of the BCII 2005, to perform building work as building workers as part of the building and construction industry. They would quite rightly respond that their work does not include building or construction work. The cynical distortion and/or manipulation of the English language by the Federal Government to enlarge the catchment area for the application of this legislation can hardly do the credibility of the process of government any good.

This concern about the breadth of definitions of what is covered by building and construction activity is a view that is also clearly shared by the Australian Industry Group, which is hardly a radical left-wing organisation. The AiG, as its submission to the Senate committee indicated, was properly concerned that the very broad definitions of the building and construction industry proposed by the bill would effectively rope in large segments of the manufacturing and services industries in the more onerous coverage of the bill and would, amongst other things, open them up to the union coverage and conditions that apply in the building industry. Very few employers, employees, unions or other parties in these industries are likely to be aware that the bill could cover these operations. As a consequence, we may well find in the definitions of building and construction in this bill that there are significant advances potentially in other people’s wages and conditions. They may find that they are regarded, by federal government fiat, as part of the building and construction industry. That could hardly be what the government intends. It clearly shows once again that, in rushing this legislation into the parliament, the government has not properly thought it through. Rather, it has been more concerned with the sorts of harangues that we have just heard from the previous speaker, the member for Hasluck, in relation to unions and industrial matters.

A further matter that is of concern are the implications for state laws and the impact on small businesses. We have a situation where the Commonwealth is purporting to use the corporations power to assert to itself a whole range of rights in relation to industrial relations in this particular industry, broadly defined as it is. In the ACTU’s submission to the Senate committee, which I referred to before, the ACTU asked the question:

... even if you assume that it is a valid exercise of power under the corporations power , how on earth does a small employer in the construction industry —and small employers are far and away the majority of employers in that industry— work their way through the myriad of laws and find out whether or not in any particular circumstance they are covered by state or federal law? It is perhaps impossible to imagine putting such employers and workers in a more complex legal situation.

In summary, this legislation forms part of an ideological obsession of the government. It is legislation that is not well motivated. It is legislation that is not motivated by any rational attempt to solve the problems that inevitably occur in every industry, including the building and construction industry. The legislation has been put together because of some sort of obsession that the government has about this particular area. But in the process the government has introduced some very serious flaws. It has certainly dramatically expanded the application of the principles of retrospectivity in areas such as this, as I indicated.

I am sure that everyone in the parliament would agree that, in matters like taxation legislation, it is not inappropriate for the measure being announced to apply retrospectively to the date that the announcement was made. But in matters of contractual obligation and of criminality, it is a fundamental breach of our understanding of the way in which our legal system ought to operate to have a situation where people find retrospectively that things they have done and have entered into in good faith are suddenly rendered illegal and subject to draconian penalties. The definition of coverage of this legislation is very clumsily crafted and, frankly, extends way beyond what the government itself probably thought it would do. It also introduces extraordinary complexities particularly for small business operators in an environment where they will not know whether or not they are covered by the Commonwealth government purporting to exercise powers in this regard. Also related to that point, it introduces complexities between state legislation and Commonwealth legislation. I think that, all things considered, it is a bad bit of legislation and ought to be rejected by the parliament.