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Wednesday, 10 August 2005
Page: 127


Mr HAYES (6:25 PM) —I am staggered by the content of the Building and Construction Industry Improvement Bill 2005 and the Building and Construction Industry Improvement (Consequential and Transitional) Bill 2005 and I am staggered by the government’s attempt to take considered and deliberate action aimed at nothing more than destroying a union. This legislation is not aimed at improving the productivity of the construction industry; it is not aimed at strengthening such a vital part of our economy. This legislation is aimed at destroying the basic rights of a particular group of Australian workers.

The construction industry is an important sector in our economy. In 2002-03, the ABS reported that the construction industry contributed 6.3 per cent to Australia’s gross domestic product. In addition, statistics released in May this year reported that, over the four quarters ending in March this year, the value of construction work done was estimated at nearly $80 billion. Analysis provided by the Greater Western Sydney Economic Development Board reported that, in 2003, the construction industry contributed 7.7 per cent to the gross regional product. This made the industry the fifth largest in its contribution to the economy of Greater Western Sydney. The construction industry is also a significant employer. In 2003-04, its average annual employment was almost 770,000. This includes some 60,000 workers in Greater Western Sydney, with nearly 5,000 living in my own electorate and two of them being my sons.

This is an industry that keeps growing. Recently, noted economic forecaster BIS Shrapnel released its expectation for the Australian building industry. While expecting a downturn in the residential sector—no doubt a reflection of people’s concerns over the impact of the government’s industrial relations agenda on their financial future—it expected that it would be offset by an increase in commercial construction. BIS Shrapnel forecasts that infrastructure investment by state governments will push the value of non-residential building commencements to almost $18 billion.

There is no doubt that this is an important and significant industry, and it is important that all our industries improve their productivity over time. However, there is little doubt about the means this government intends to employ to achieve this so-called productivity improvement. This government is determined to tear apart the building and construction industries as we know them. The provisions of this legislation are divisive and destructive. I am not about to stand before this House and say that everything is fine in the building industry. I am certainly not going to stand before the House and defend all actions of a small minority that may at times take the law into their own hands. However, I do wish to present some evidence that the members opposite may not have been privy to when they put their support behind this bill.

People in this industry are deeply concerned about the provisions of this legislation. They are deeply concerned because, once this legislation becomes law, they will become second-class citizens. People in the construction industry will become second-class citizens to the rest of the Australian work force. However, it is not only those in this industry and their families who are concerned. When people outside of this industry hear of what is going on, they too will be deeply concerned. Why? Because they will fear they could be the next industry to be targeted by this government.

The aim of the government in terms of the building industry is the same as it was on the waterfront. The only difference is that the media imagery is not of balaclavas and attack dogs. The government learned from their mistake in that regard. This time the government has replaced balaclavas with courtrooms and replaced the attack dogs with lawyers. The government spent $60 million of taxpayers’ money on a politically motivated royal commission to embarrass the Labor Party and attack the union movement, but it did not work. As the editorial in the Age reported on 28 March 2003 after the release of the commission report:

Stripped of politics, the building industry inquiry might have been more productive.

It went on to say:

The royal commission found 392 instances of unlawful conduct committed by individuals, employers and unions, including illegal strikes, breaches of the Trade Practices Act, misuse of health and safety laws, and intimidatory behaviour ... but a root-and-branch reorganisation of the industry was not proposed by Mr Cole.

The editorial also noted that evidence of the most serious forms of malfeasance, such as bribery and corruption, did not feature prominently in its hearings. So despite the Cole royal commission not being as definitive in its findings as the government may have hoped, we are debating a bill aimed at introducing, in the words of the minister, ‘all that is necessary to reform the building and construction industry’.

This brings me to the issue at the heart of my own concerns. Opposition senators on the Senate Employment, Workplace Relations and Education Legislation Committee provided a reasonable summary of those concerns. In their report on the legislation, they concluded that:

Opposition senators regard this legislation as obsessively punitive and opportunistic.

That is exactly what it is. While the bill does not reintroduce the full legislative response to the Cole royal commission previously before the parliament, it nevertheless goes a long way towards it. The provisions of this bill introduce the broader definition for building work. It introduces new definitions for unlawful action. It introduces onerous financial and civil penalties. It grants employers of the Department of Employment and Workplace Relations considerable new powers and strays into state based industrial relations regimes. These are significant changes with significant impacts, and significant changes that will be introduced retrospectively.

I will return to the retrospectivity of this bill a little later, but I would like to consider the consequences of this bill and why the minister has made its passage one of the highest priorities upon the resumption of this parliament. While of course some might say it is a distraction for the opposition members in their campaign against the minister’s industrial relations proposals, I know it is not. I think the reason is pretty simple. This bill has been introduced in a truncated form with one aim and one aim only: to try to discourage the building industry employers from signing the next round of wage agreements before the government’s new industrial relations agenda is finalised. Sadly, it has not worked and the government has resorted to its own form of persuasion—changing the rules on government construction contracts. I can only assume that the government sees no hypocrisy in using its own economic strength to intimidate the building industry.

What lies at the heart of this bill that makes it so dangerous? I have said before in this place that the devil is in the detail and so it appears in many of the other legislative solutions introduced by this government. This bill is no exception. Considering the provisions of the bill in more detail, I would like to state my objection to the clause that is causing the most concern for my constituents. That is the introduction of considerable financial penalties. This bill provides for penalties up to $110,000 for organisations but up to $22,000 for individuals. That is 1,000 per cent more than the financial penalties prescribed under the Workplace Relations Act—1,000 per cent. The Australian Bureau of Statistics reported in 2002-03 that the average wage and salary per employee was around $40,000 per annum. Of course, wages and salaries have increased since then, but the government is nevertheless proposing to introduce penalties that are up to half the annual wage of a construction worker. I know that is certainly making construction workers in my electorate nervous. They are not nervous because they have something to hide; they are nervous for the financial security of their families.

Construction workers I have spoken to over the past few weeks are regular hardworking Australians and they do not expect, and certainly do not deserve, this kind of treatment. Nor do the other hundreds of thousands of hardworking construction workers throughout the country. My mind at this stage turns to one particular case. An employee of a very well-known building company in my area was recently asked to sign an AWA, an Australian workplace agreement. When he refused he found that he was made redundant. This employee had a job if he agreed to sign a contract that was cutting his wages and conditions, but if he remained under the award, as he wanted to, he did not have a job. So this fellow, who had been with the company for 26 years and had a dependent family, found himself sacked because he would not sign the agreement that the employer wanted him to sign to continue his employment.

Given the injustice of this, it naturally led to an industrial dispute and action that was actually taken on his behalf by the CFMEU. As a result of a rather public campaign, some weeks later this employee was reinstated. But, given the retrospective application of various clauses of this bill, I have to wonder whether or not this employee, his work colleagues who supported him in defending his rights and indeed the union who helped negotiate his reinstatement may all be subject to financial penalties. Now that he has been reinstated, will this employee be subject to the sanctions that apply in this bill?

But, of course, a massive increase in penalties is not the end of it. Clause 227 provides that the court may order compensation to be paid to any person who has suffered damage. Third parties who are not directly involved in the dispute can seek compensation through the courts and this compensation is uncapped. The worst part of it is that, as a result of the retrospectivity of the provisions of the bill, fines could be accumulating now and the workers might not even know it.

Again, I have to wonder about the financial position of the employee of the large building company that I referred to earlier. Has this employee, through his legitimate defence of his own position, now created a legal liability for himself? Has he, by standing by his own principles and convictions, opened himself up to third parties seeking to claim compensation under clause 227? I wonder whether this poor chap and his family even know that we are debating legislation tonight that may make his financial position even more precarious than he first thought.

I have yet to see the government launch a $20 million advertising blitz to inform the construction industry workers of the retrospective changes included in this bill. The creation of retrospective law, particularly when it comes to actions that may be subject to criminal sanctions, is a dangerous approach to law making. I am not aware of any forum, either in the Senate Employment, Workplace Relations and Education Legislation Committee hearings or in this place, in which the government has presented a reasonable defence of the use of retrospectivity in this bill. There is no reasonable argument that can be mounted for its use and that is why its use should be vigorously opposed.

I also have deep concerns about the government’s approach to the partial exclusion of state laws from the national industrial relations regime. The use of the bill to deem industrial action taken under some state and territory laws to be illegal is likely to lead to serious problems, most of which will be inflicted upon small businesses in the industry. As the NSW government submission to the Senate committee inquiry pointed out, this law breaches the International Labour Organisation’s conventions regarding the right to organise, the right to collective bargaining and the right to freedom of association.

Small businesses comprise the vast majority of businesses in the construction industry and I doubt that they have the time or the inclination to wade through the various laws to find out whether a particular set of circumstances is covered by state or federal law. The legal and financial situation that this may place employers and their employees in is near impossible to imagine. Placing hardworking Australians on a financial and legal precipice is no way to promote industry reform. The creation of a climate of fear is the least effective way to set about cultural change.

Setting about changing the rules and introducing a compliance regime of increased penalties, uncapped compensation and heavy-handed regulation of industrial action is nothing more than union busting. The provisions of this bill are clearly aimed at the construction unions and no-one else. If the government were truly making an attempt to promote industrial reform in the construction industry, this bill would include tougher sanctions on rogue employers. This bill should include provisions to crack down on employers who fail to provide adequate working conditions and fully implement all the requirements of occupational health and safety laws. The government should be cracking down on employers who fail to provide for entitlements for their employees. But, of course, this bill has nothing to do with the industry and everything to do with the union movement.

Unfortunately we have to wait until further legislation is introduced to see if the government is as concerned about rogue employers as the minister claimed he was in March last year in a speech in this place. It is easy for me to oppose this bill because I have doubts about the basic assumptions on which the government built their case. We have all read the findings of the Cole royal commission and the economic analysis of the sector, but recently I read another document that casts some doubt on the economic arguments. The Employment Studies Centre of the Newcastle Business School at the University of Newcastle has cast considerable doubt upon the intra-industry, interstate and international comparisons of productivity. The minister based much of his argument on the potential for productivity improvement. However, reasonable doubt has been cast on the potential for improvement to be realised. The Employment Studies Centre reported:

On the basis of data from the Australian Bureau of Statistics and research undertaken for the Cole Royal Commission Into the Building and Construction Industry it is evident that productivity performance of the Australian construction industry is at or close to international best practice.

It went on to say:

Other research indicates that the most important factors in promoting competitiveness in the construction industry relate to lifting the level of consultation between management and labour; improving OH&S; ensuring sufficient supply of skilled labour and regular upgrading of these skills and improving the technical skills of project management ...

It concluded with the following:

Unfortunately, these drivers of productivity have been largely ignored under current policy settings.

I have never shied away from my own involvement in the trade union movement and my own experience in the benefit of negotiation over confrontation and I do not shy away from them now.

The 5,000 or so construction workers in my electorate do not appreciate being treated like industrial terrorists. If improvements in the building and construction industry really are the goal of this legislation, let us get it right. Let us get rid of the punitive measures being introduced through the bill and start a constructive dialogue between employers and employees. Let us get rid of the rogue elements in the industry through reasonable means, not through a legislative agenda that is so clearly stacked against Australian workers in the construction industry. The government’s own senators when considering this bill noted in their majority report:

Harassment and intimidation have no place in modern industrial relations.

So let us get it right. Let us reject this bill and everything it stands for.