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Thursday, 3 November 2011
Page: 12686

Mr CREAN (HothamMinister for Regional Australia, Regional Development and Local Government and Minister for the Arts) (09:40): I move:

That this bill be now read a second time.

Today I introduce the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2011. This bill was introduced in 2009, but lapsed when parliament was prorogued on 19 July 2010.

The government made a commitment to the Australian people that it would replace the Australian Building and Construction Commission (ABCC) with a new body to provide a balanced framework for cooperative and productive workplace relations in the building and construction industry.

This new body will be the Fair Work Building Industry Inspectorate (the building inspectorate).

The government also committed to consult extensively with industry stakeholders to ensure the transition to the new arrangements would be orderly and effective.

On this basis, the former minister appointed retired Federal Court Judge, the Hon. Murray Wilcox QC to consult and report on matters related to the creation of the building inspectorate. Mr Wilcox consulted widely with industry and delivered his report to the government on 31 March 2009.

This bill honours the government's commitment and gives effect to the principal recommendations in Mr Wilcox's report.

The building and construction industry remains a critical sector of our economy, with immediate and direct impact on jobs, growth and productivity. This was particularly so during the global economic recession, during which the government's Nation Building and Jobs Plan ensured that the Australian economy remained one of the strongest in the developed world.

The government understands that the industry contains unique challenges for both employers and employees, and as a result we have always supported a strong building industry regulator to ensure lawful conduct by all parties.

The government believes that the ABCC needs to be replaced with a new body that is part of the mainstream Fair Work Australia system. This new regulator will operate in accordance with community expectations of a fair and just workplace relations system.

Description of the Bill

The principal object of the bill recognises the government's intention to provide a balanced framework for cooperative and productive workplace relations for the building and construction industry. A key objective of this bill is compliance with workplace relations law by all building industry participants, including employers, employees and their respective associations.

This bill aims to provide fairness in the industry by ensuring information, advice and assistance is available to all building industry participants in connection with their rights and responsibilities under relevant laws.

The bill provides effective means for investigating and enforcing relevant workplace laws while balancing the rights of building industry participants through the provision of appropriate safeguards in relation to the use of the building inspectorate's enforcement powers.

ABCC to be replaced

As I said earlier, this bill gives effect to the government's election commitment to abolish the ABCC and transfer its responsibilities to a specialist Fair Work building inspectorate. The bill provides that the new building inspectorate will ensure compliance with general workplace relations laws, as prescribed in the Fair Work Act 2009, by all building industry participants.

The building inspectorate

The new building inspectorate will be headed by an independent director appointed by the minister. The director will manage the operations of the building inspectorate and will not be subject to oversight or control by other statutory office holders.

This model gives best effect to Mr Wilcox's recommendation that the director have 'operational autonomy' and reflects various stakeholder consultations on this point.

Consistent with Mr Wilcox's recommendations, the bill also creates an advisory board consisting of industry stakeholders to make recommendations to the director on the policies and priorities of the building inspectorate. While the advisory board will not determine the inspectorate's policies and priorities, the director will consider the advisory board's recommendations.

Scope and penalties

Consistent with Mr Wilcox's recommendations, the definition of 'building work' is amended to remove its coverage of off-site work; thereby focusing the scope of the inspectorate's operations to work on sites.

The building inspectorate will be charged with enforcing the building industry's compliance with the general law as prescribed in the Fair Work Act. In particular, and as recommended by Mr Wilcox, the bill removes:

higher penalties for building industry participants for breaches of industrial law; and

the broader circumstances under which industrial action attracts penalties in relation to the building industry.

The retention of coercive examination powers

While building participants will be subject to the same penalties as other workers, Mr Wilcox found that the need to retain the existing coercive examination powers was proven.

Mr Wilcox describes the ongoing need for coercive powers in his report as follows:

… I have reached the opinion that it would be unwise not to endow the [Specialist Division] (at least for now) with a coercive interrogation power. Although conduct in the industry has improved in recent years, I believe the job is not yet done.

The government accepts the need to retain these powers for the time being but is also heartened by the continuing improvements in behaviour in the industry. Changes in practices by the ABCC have seen a dramatic reduction in the need to use these powers. For example, the ABCC only resorted to using its compulsory examination powers six times in 2010-11, compared to 37 times in the previous year.

The ABCC attributes this reduction to a number of factors, including better communication about the obligation to provide information voluntarily, a focus on the timeliness of investigations, and changes to the way investigations are carried out. Of course, much of the credit for these changes and the decreased use of the compulsory examination powers should be attributed to the ABC Commissioner, Mr Leigh Johns. Since his appointment in October 2010 Mr Johns has administratively implemented a number of Mr Wilcox's recommendations and personally driven a number of positive custom and practice changes within the ABCC.

It is also important to note that this reduction in use of these strong powers has, according to the ABCC, not hampered their ability to investigate matters. As the ABCC's 2010-11 annual report states:

A key feature of the ABCC’s activities this year was a marked decrease in the use of s. 52 as a compliance technique with no reduction in the number of investigations undertaken. In short, the reduced reliance on s. 52 has not adversely affected regulatory activity or success.

In retaining the coercive examination powers this bill also includes the following safeguards recommended by Mr Wilcox in relation to the use of the powers:

use of the powers is dependent on a presidential member of the Administrative Appeals Tribunal being satisfied a case has been made for their use;

persons required to attend an interview may be represented by a lawyer of their choice and their right to claim legal privilege and public interest immunity will be recognised;

persons required to attend an interview will be reimbursed for their reasonable expenses;

all interviews are to be videotaped and undertaken by the director or an SES employee;

the Commonwealth Ombudsman will monitor and review all interviews and provide reports to the parliament on the exercise of this power; and

the powers will be subject to a three year sunset clause.

Sunset clause for the compulsory examination powers

Consistent with Mr Wilcox's recommendation the legislation includes a sunset clause on the availability of the coercive powers, which the government considers appropriate in relation to these strong industry specific powers. The provisions will sunset in three years (rather than the five years specified in the 2009 bill) reflecting the fact that Mr Wilcox recommended that they be reviewed after a five-year period back in 2009. The compulsory interrogation powers have continued to operate in the industry since that time. Given the significant reduction in the need to use the powers in recent years, the government is satisfied that a further three-year period, rather than five, is appropriate.

The priority for the building industry is to achieve cultural change so that compulsory examination powers will become unnecessary—the sunset clause reflects this priority. The government will conduct a review of these powers to determine whether there is an ongoing need for them before the sunset period expires.

Relevantly, in his report Mr Wilcox says:

… I am confident the safeguards I have recommended, if implemented, will minimise the unnecessary use, and potential for misuse, of the power; without impeding, or significantly delaying, investigations …

The government agrees with this assessment.

Coercive examination powers and the independent assessor

The government was heartened by the fact that Mr Wilcox was not of the view that there are widespread and broad problems for the industry across the country. We agree and we note that the vast majority of participants in the industry are hardworking and law-abiding men and women.

However, there are also problems and a clear need to continue to drive cultural change in some key areas of the industry is required.

On this basis the bill creates the office of the Independent Assessor—Special Building Industry Powers, who may, on application from stakeholders, make a determination that the coercive interrogation powers will not apply to a particular project or projects.

In determining whether to 'switch off' the coercive powers for particular projects, the independent assessor must be satisfied that it would:

be appropriate to make the determination, having regard to the objects of the act, and

not be contrary to the public interest to make such a determination.

In the event that a project where the coercive powers have been switched off experiences industrial unlawfulness the independent assessor may revoke his or her original decision; thereby switching the powers back on. Additionally, the director of the building inspectorate can request that the independent assessor reconsider their decision at any time based on changes in circumstances on a specific project.

These 'switch off' provisions ensure that the powers are focused where they are needed most. The government is determined to encourage lawful behaviour and a change in the industry's culture. These arrangements provide the industry with the opportunity to demonstrate that the requisite lawful culture is in place and that the coercive examination powers are not required.

The Office of the Federal Safety Commissioner

Finally, the government understands the importance of safety at work in the building and construction industry. Mr Wilcox was not asked to review the operation of the Office of the Federal Safety Commissioner, OFSC, or the associated Australian Government Building and Construction OHS Accreditation Scheme—the scheme. This bill therefore makes no changes to the provisions of the BCII Act that relate to the OFSC and the scheme.

The government is of course conscious of the need for continuous improvement in the regulatory arrangements and the Department of Education, Employment and Workplace Relations is currently considering the details of a review of the OFSC and scheme.


The government is committed to implementing a strong but fair set of compliance arrangements for the building industry. The government has consistently stated that anyone who breaks a law should feel the full force of the law. The government understands that not all building industry stakeholders agree on all matters. The government's intention is to provide a balanced framework for cooperative and productive workplace relations, an environment in which there is no place for people choosing which laws to obey and which ones to ignore. This goes for all industry participants—employers, employees and their respective associations.

The government believes that the safeguards in the bill for the coercive examination powers achieve the balance required to ensure compliance with the law and the fair treatment of individuals. Law-abiding industry participants who have nothing to fear from the existence of these strong laws will be so accorded. Ultimately, whether or not the powers are used remains in the hands of all building industry participants.

The government understands that only considered, fair and balanced laws will create the sort of long-term change that Australia's building and construction industry needs if it is to flourish, to continue to create jobs and to make a positive contribution to national productivity and prosperity. The government believes that this bill provides considered, fair and balanced laws. I commend the bill to the House.

Debate adjourned.