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Wednesday, 17 June 2009
Page: 6245

Ms GILLARD (Minister for Education, Minister for Employment and Workplace Relations and Minister for Social Inclusion) (9:02 AM) —I move:

That this bill be now read a second time.


The building and construction industry is a critical sector of our economy with immediate and direct impacts on jobs, growth and productivity. Its importance is demonstrated by the scale and scope of construction funding the Australian government has committed through the Nation Building and Jobs Plan which will result in 35,000 construction sites around the country, building the infrastructure we need for tomorrow and supporting jobs today. This construction activity is the direct result of the government’s $29.9 billion investment in schools, housing, energy efficiency, community infrastructure, roads and support to small businesses.

As our budget set out, a central feature of our economic recovery plans is our Nation Building for the Future package, which builds on our earlier economic stimulus plans and delivers:

  • $8.4 billion in new road, rail and ports infrastructure;
  • $4.7 billion for the National Broadband Network;
  • $3.1 billion for new hospitals and medical facilities;
  • $2.6 billion for education infrastructure; and
  • $3.5 billion for clean energy developments.

A total additional spend of over $22 billion to see the nation through the current global recession to a stronger future by boosting our long-term productive capacity through investing in skills, education and human capital.

While we can design these nation-building initiatives, our capacity to deliver on them is dependent on having a safe, productive and harmonious construction sector.

Prior to the 2007 election, the Labor Party promised that it would retain the Office of the Australian Building and Construction Commissioner (the ABCC) until 31 January 2010, when it would be replaced by a specialist Fair Work inspectorate.

Labor also committed to consult extensively with industry stakeholders to ensure the transition to the new arrangements would be orderly and effective. On this basis, in June 2008 I appointed the Hon. Justice Murray Wilcox QC, a retired Federal Court judge, to consult and report on matters related to the creation of the specialist Fair Work inspectorate. Mr Wilcox provided his report in March this year having consulted very widely via face-to-face meetings around the country, by receiving written submissions and through public debate forums and industry events. Mr Wilcox undertook a considerable amount of work and I take this opportunity to thank him for his efforts and his thoughtful and balanced report.

Since receiving Mr Wilcox’s report the government has undertaken further consultations on the report’s recommendations with stakeholders, including with my state and territory workplace relations ministerial colleagues, in finalising the government’s response. I thank all stakeholders for their contributions and submissions to the consultations with Mr Wilcox and the government.

The bill before us today delivers on the Rudd government’s election commitment to the Australian people.

The government understands that the building and construction industry stakeholders do not agree on all matters but we must agree, as I am sure that every decent Australian agrees, that there is no place in any industry for people choosing which laws to obey and which ones to ignore; for underpayment of wages or sham contracting or violence and intimidation in the workplace. Labor is committed to implementing a strong set of compliance arrangements for the building industry, a strong ‘cop on the beat’, and the Rudd government has consistently stated that anyone who breaks a law will feel the full force of the law.

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 in the building and construction industry.

A key objective of this bill is compliance with workplace relations law in the industry by all building industry participants including employers, employees and their respective associations.

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

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

This bill seeks to improve the level of occupational health and safety in the building industry. The bill retains the Office of the Federal Safety Commissioner (OFSC) and its related accreditation scheme, which have resulted in demonstrated improvements in the occupational health and safety practices and records of accredited companies and related projects.

ABCC to be replaced

This bill gives effect to the government’s election commitment to abolish the ABCC and transfer its responsibilities to a specialist fair work inspectorate from 1 February 2010.

The bill creates the new Office of the Fair Work Building Industry Inspectorate (the building inspectorate) and provides that this new agency will ensure compliance with the general workplace relations laws, as prescribed in the Fair Work Act 2009 by all building industry participants.

The creation of the building inspectorate creates certainty for industry participants, and it meets our election commitment to keep a strong ‘cop on the beat’ for the benefit of the industry and the economy.

The Independent Building Inspectorate

The building inspectorate created by this bill 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’ recommendation that the director have ‘operational autonomy’ and reflects various stakeholder consultations on this point.

This structure also gives the best possible effect to Mr Wilcox’ recommendations to provide identified funding to the inspectorate and its own dedicated operational staff, including inspectors.

Consistent with Mr Wilcox’ recommendations the bill also creates an advisory board 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 their recommendations when determining the policies and priorities of the building inspectorate.

Mr Wilcox noted that, across the nation, there exist different levels of unlawfulness within the building and construction industry. The government believes that it is important to ensure that every effort should be made to focus compliance activities where those activities are most needed.

Consequently, today I will issue a ministerial direction to the Australian Building and Construction Commissioner, under section 12 of the Building and Construction Industry Improvement Act, to provide a report to me which maps out the ABCC’s resources allocation and placement compared to locations with high levels of unlawfulness as evidenced by allegations, investigations, prosecutions, audits and the like. This report will be required by 27 July 2009.

I will consider this report in the context of ensuring that the resources of the ABCC and from 1 February 2010 the building inspectorate are focused on those areas that have a demonstrated culture of unlawful behaviour.

Scope and Penalties

Consistent with Mr Wilcox’ 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 on 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. As recommended by Mr Wilcox, the bill removes:

  • higher penalties for building industry participants for breaches of industrial law, and
  • broader circumstances under which industrial action attracts penalties in relation to the building industry.

The retention of coercive interrogation 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 interrogation powers was proven.

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

It is understandable that workers in the building industry resent being subject to an interrogation process that does not apply to other workers, designed to extract from them information for use in penalty proceedings against their workmates and/or union. I sympathise with that feeling and would gladly recommend against grant of the power. However, that would not be a responsible course. I am satisfied there is still such a level of industrial unlawfulness in the building and construction industry, especially in Victoria and Western Australia, that it would be inadvisable not to empower the [Specialist Division] to undertake compulsory interrogation. The reality is that, without such a power, some types of contravention would be almost impossible to prove.

I have reached the opinion that it would be unwise not to endow [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.

In retaining the coercive interrogation powers this bill also includes the following safeguards, including all of the safeguards recommended by Mr Wilcox, in relation to the use of the power:

  • 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 their deputy,
  • 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 five-year sunset clause.

The bill contains a sunset clause for the coercive powers at the end of five years from 1 February 2010. A review will occur prior to the sunset clause on all matters relating to compliance in the building and construction industry. Such a review would be inclusive of all stakeholders.

With respect to the issuing of an examination notice the presidential member of the Administrative Appeals Tribunal must be satisfied that:

  • all other methods of obtaining the material or evidence have been tried or were not appropriate;
  • the information or evidence would be likely to be of assistance to the investigation; and
  • it would be appropriate, having regard to all of the circumstances, to issue the examination notice.

As detailed in the bill’s explanatory memorandum, it is intended that the presidential member takes into account all of the relevant circumstances when making a decision as to whether the issue of an examination notice is warranted. The relevant circumstances include whether the alleged breach is sufficiently serious or whether being required to comply with a notice would have an undue impact on the person.

Relevantly in his report Mr Wilcox says:

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

The government agrees with this assessment and sees these measures as providing appropriate safeguards to the use of these powers.

It is appropriate at this time that I also inform the House that today I will be issuing a ministerial direction under the Building and Construction Industry Improvement Act to the Australian Building and Construction Commissioner concerning the application of coercive powers and the conduct of compulsory interviews.

This direction will require that the following safeguards be implemented:

  • the legal representative permitted to attend with a person who is the subject of a coercive powers hearing may sit and speak with their client at all times, speak on behalf of the client and be given the time and privacy to consult and advise the client;
  • the ABC Commissioner must comply with the model litigant policy of the Commonwealth;
  • the ABC Commissioner must provide a reasonable opportunity for an objection to be raised to a particular exercise of the coercive power and allow any such objection to be tested in an appropriate court or tribunal;
  • before exercising the coercive power, the ABC Commissioner must provide a nominated person who is a Presidential Member of the AAT, acting in their personal capacity, with a report describing the person against whom the power is to be exercised, the purpose of the exercise of power, the urgency, the likely effect on the person and whether the purpose can be achieved in another way; and
  • having provided the report the ABC Commissioner must consult with the nominated person and receive written advice from the nominated person on their opinion in respect of the proposed exercise of power.

This direction will take effect from 3 August 2009 in order to allow the ABC Commissioner to put the necessary mechanisms in place and for me to appoint the nominated person.

Coercive interrogation powers and the Independent Assessor

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

But the reality is there are also problems in this vital sector. There is a clear and immediate need to drive cultural change in some key areas of the industry.

Accordingly, the legislation is aimed at driving cultural change in the industry and focusing compliance activities where those activities are most needed.

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

It is important to explain how this ‘switch off’ power will work.

From 1 February 2010 the increased safeguards on the use of coercive powers will apply to all existing and new projects.

All projects that commenced prior to 1 February 2010 will remain covered by coercive powers.

All projects that commence on or after 1 February 2010 will start with the coercive powers ‘switched on’.

On projects that commenced on or after 1 February 2010 an interested person will be able to make an application to the Independent Assessor to have coercive powers switched off in relation to a specific project.

In determining whether to switch off the coercive powers, the Independent Assessor must be satisfied that:

(a)  it would be appropriate to make the determination, having regard to:

(i)   the object of this act; and

(ii)  any matters prescribed by the regulations; and

(b)  it would not be contrary to the public interest to make the determination.

In the event that a project where the coercive powers have been switched off experiences industrial unlawfulness the Independent Assessor may rescind or revoke the original decision, thereby switching the powers back on. Additionally, the Director of the Building Inspectorate may request the Independent Assessor reconsider the decision at any time based on changes in circumstances on a specific project.

These 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 the opportunity for the law-abiding majority to not be tarred with the same brush as the unlawful rogue elements.

The Office of the Federal Safety Commissioner

Finally, the government knows the importance of safety at work in the building and construction industry. This bill retains the provisions of the BCII Act that relate to the Office of the Federal Safety Commissioner (OFSC) and its related OHS Accreditation Scheme.

The government’s review of existing regulatory arrangements for the building and construction industry never intended to address the OFSC and the scheme as it has always been the government’s intention to retain the OFSC and the scheme. These issues were deliberately not included in Mr Wilcox’s terms of reference on this basis.

The OFSC and the scheme are strongly supported in the industry and retention of the OFSC and the scheme reflects the government’s commitment to OHS compliance in this vital industry.


This bill ensures balance and fairness for all participants in the Australian building and construction industry.

There are those who will be critical of the government’s reforms on both sides of the industry. We accept that differences in views and perspectives make this criticism almost inevitable and that some may be disappointed in some parts of this bill. I am also disappointed; disappointed that there are still pockets of the industry where people think they are above the law, where people engage in intimidation and violence.

Having said that, the government believes that the safeguards that are being introduced achieve the balance required to ensure compliance with the law and the fair treatment of individuals. Law abiding industry participants have nothing to fear from the existence of these strong powers to deal with rogue elements in the industry. Ultimately, whether or not the powers are used is in the hands of all building industry participants themselves. If the law is abided by then the powers will not be used.

The Rudd Labor government is resolute in honouring its election commitment to abolish the Australian Building and Construction Commission and replace it on 1 February 2010 with a new specialist Fair Work inspectorate.

The Rudd Labor government believes in making this nation stronger and fairer. The government understands that only considered, fair and balanced laws will create the sort of long-term change Australia’s building and construction industry needs if it is to flourish, create jobs and make a positive contribution to national productivity and prosperity.

This is what this bill does. I commend the bill to the House. In doing so, I record my personal thanks to Michael Maynard of my department and to Peter Cully for their efforts on this bill, to the draftspeople in the Office of Parliamentary Counsel and, particularly, to Craig Carmody in my office. I also record my thanks to my caucus colleagues for the debates on this bill yesterday.

Debate (on motion by Mr Haase) adjourned.