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Thursday, 13 August 2009
Page: 7790

Mr KELVIN THOMSON (10:54 AM) —People who think there is no difference between the political parties ought to pay more attention to parliamentary debates. In particular they ought to pay more attention to this one on the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2009, because it makes absolutely clear what a stark difference there is between the parties. The member for Fadden just described the CFMEU as akin to terrorists. He gives the game away. He and the other Liberal Party members simply cannot help themselves. The Liberal Party is still the party of Work Choices.

The purpose of this bill is to implement the key recommendations of the Wilcox report on the transition to Fair Work Australia for the building and construction industry through amendments to the Building and Construction Industry Improvement Act 2005. Some of the key amendments of the bill include the abolition of the Australian Building and Construction Commission and the establishment of a new and separate regulator independent of the Fair Work Ombudsman to administer the amended regulatory framework for the building and construction industry.

The bill abolishes the offices of the ABC Commissioner and the deputy commissioners. These will be replaced with a director. 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 building sites. The bill also removes the existing building industry specific laws that provide 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.

An area of ongoing controversy has been the question of what are referred to as the coercive powers. The bill creates an office, the independent assessor, which, on application from stakeholders, may make a determination that the examination notice powers will not apply to a particular project—that is, that the coercive powers will be switched off for a particular project. In the event that a project where coercive powers have been switched off experiences industrial unlawfulness, the independent assessor may rescind or revoke the original decision, switching the powers back on based on the same criteria that were used when switching them off. The director may request that the independent assessor review the decision at any time based on changes in circumstances on a particular project.

While the coercive powers have been retained, there are significant amendments to implement the Wilcox recommendations regarding external oversight, including that each use of the powers is dependent upon a presidential member of the Administrative Appeals Tribunal being satisfied a case has been made for their use, that persons summonsed to interview may be represented by a lawyer of their choice and that their rights to refuse to disclose information on the grounds of legal professional privilege and public interest immunity will be recognised. I welcome these safeguards and the intention to sunset the coercive powers in five years time.

I think it is important that House revisit the original, spurious premise for the Building and Construction Industry Improvement Act 2005 and its regulator, the Office of the Australian Building and Construction Commissioner—that is, that we revisit the Cole royal commission, which was established in 2001. From the outset, the Howard government ensured, in setting the commission’s terms of reference, that specific matters, like alleged union misconduct in the industry, received greater scrutiny than other matters. At the time, the establishment of the royal commission was not prompted by any particular issue or dispute in the building and construction industry. In fact, in research papers provided to the commission, the Australian construction industry ranked second or better in 16 of the 23 comparative international studies of the industry consulted by the researchers. On productivity specifically, Australia ranked second in five of the seven reports. On completion times, Australia ranked second in all studies. Finally, on cost per square metre, Australia was consistently rated as second lowest in all studies. This clearly demonstrated that the industry was internationally competitive, rather than one that required radical reform.

A report by the Employment Advocate in May 2001 made allegations of union corruption, fraud and other illegality in the building and construction industry. According to lawyers who closely observed the commission, none of the allegations contained in the Employment Advocate’s report were borne out by evidence, and few of them were even aired in commission hearings. The bias of the commission was also apparent. Ninety per cent of hearing time was devoted to anti-union topics. Six hundred and sixty-three employers or their representatives gave evidence, but only 36 workers. Around three per cent of hearing time was spent dealing with allegations about the wrongdoing of employers. While the royal commission made numerous findings against employee organisations and individuals, very few were made against employers.

The restrictive industrial action provisions that would later form an integral part of the Building and Construction Industry Improvement Act were based on contentious findings of the commission and on a small number of incidents of unprotected action within the context of the industry as a whole. It is difficult not to conclude that the establishment of the royal commission was essentially a political act that was more about Liberal Party ideology than sound economic policy. It was little more than a political exercise, using dubious findings to drive a strategy to undermine union influence in the construction and building industry and provide a smokescreen to justify the introduction of harsh anti-union measures.

In recommending the establishment of an industry specific regime, the royal commission characterised the building and construction industry as singular due to its lawlessness, yet it did not make this judgment based on any comparison with other industries. As George Williams and Nicola McGarrity indicated in their article entitled ‘The investigatory powers of the Australian building and construction commission’ for the Australian Journal of Labour Law:

It is therefore unclear on what basis the Royal Commission could describe the building and construction industry as ‘singular’.

Any differences between industries are likely to be a matter of degree. For example, there is nothing about the lawlessness identified by the royal commission, including breaches of the proper standards of occupational health and safety, application of inappropriate industrial pressure and threatening and intimidatory conduct, that is unique to the building and construction industry. The royal commission found that the existing non-industry specific bodies had inadequate powers to enforce Commonwealth industrial law. If this was true, then there was a problem that needed to be rectified for all industries and not simply in the field of building and construction. As Stewart argued in 2003:

If these amendments are worth introducing, why aren’t they worth introducing more generally?

In the selectivity of its jurisdiction, the ABCC differed from other bodies possessing investigatory powers. The ACCC, for example, has jurisdiction over all persons and organisations, regardless of the industry in which they work or operate, that contravene the Trade Practices Act. By contrast, we had created a body like the ABCC, whose jurisdiction was limited to a single industry, thereby establishing different sets of rules and rights for different workers and employers. It is worth while for the House to note that the CFMEU early this year received formal confirmation that the $66 million Cole royal commission resulted in only two prosecutions—one company prosecuted over strike pay and one union official prosecuted for giving false evidence. No union official or construction worker was prosecuted, let alone convicted, for corruption or criminality arising from the terms of reference for the royal commission.

In recommending these construction industry laws, the commission also had a complete disregard for Australia’s international obligations under ILO conventions to which Australia is a party. In fact, in November 2005 the ILO Committee on Freedom of Association found the Building and Construction Industry Improvement Act breached ILO conventions 87 and 98 on freedom of association and collective bargaining. It is important for the Australian government to fulfil its international obligations regarding our domestic industrial relations arrangements and to act as a leader by demonstrating a genuine substantive commitment to the principles of the ILO.

As I have mentioned in the parliament before, the economic case for the Howard government’s legislation was refuted by a paper co-authored by Griffith University Professor David Peetz called ‘Constructing figures: the mythology of productivity in the Australian building and construction industry’, which pointed out fundamental flaws with the Econtech reports that were used to support the role of the Australian Building and Construction Commissioner. In fact, in that report in reference to the fact that the construction industry is one of the most dangerous industries in the economy, the authors suggest:

It may be that there may be greater economic benefits in focusing on effective occupational health and safety regimes in the industry. It is almost certainly the case that there would be greater social and ethical benefits in doing so.

This is an important point because, since the introduction of the Building and Construction Industry Improvement Act, safety in the industry has deteriorated, with deaths having increased from 19 in 2004-05 to 40 in 2007-08. The lack of action to reduce workplace deaths and improve health and safety on construction sites was a damning indictment of the Building and Construction Industry Improvement Act and of the ABCC. There can be no case for allowing a deterioration in safety standards in the industry. The focus should be on lifting the standard of employer duty of care to ensure that workers’ health and safety is protected. The ABCC failed to adequately deal with employers who broke the law or cut corners on safety. As has been noted in Creighton and Stewart’s Labour Law in reference to the 1969 O’Shea case:

… excessive and insensitive use of enforcement procedures—especially procedures that do not accord adequate respect to the right of workers and unions to take industrial action to protect and promote their legitimate social and economic interests—may well be counter-productive both in terms of those who seek to use them and in terms of protecting the integrity of the system of which they are a part.

The House should contrast the attitude of the Howard government on this issue to that of the Hawke and Keating governments. In pursuing industrial relations reform, the Hawke and Keating governments were successful in significantly increasing productivity levels in the building industry. This was achieved by promoting a cooperative, non-discriminatory approach in workplace relations.

The BCII Act and the ABCC are relics of an adversarial system. I do not think they have any place in a modern economy. Labour law should be balanced, promoting the interests of both employers and employees. We are at a time in our global economy where uniformity and flexibility are both necessary for our labour relations system. I refer to comments by Professor Andrew Stewart. In a submission to the Productivity Commission, he said: ‘The adoption of a national approach includes having laws which avoid unnecessary burdens or restrictions; are not unduly prescriptive; are accessible, transparent and accountable; are integrated and consistent with other laws including international standards.’ What we should be striving for is a seamless national workplace relations system that is flexible and productive and that will respond effectively to the challenges as we emerge from the global financial crisis.

These debates about industrial relations demonstrate the absolute bedrock of difference between the Liberal Party and the Labor Party. The Liberal Party’s belief in free markets, in market fundamentalism, is such that they believe in individual bargaining between employers and employees. The Labor Party, by contrast, believe that this is inherently unfair. We believe that the inherent bargaining strength of employers needs to be leavened and some balance achieved, essentially in three ways. Firstly, we believe that there needs to be a right for employees to organise themselves and bargain collectively through trade unions. Secondly, we believe in the existence of an independent umpire who can resolve disputes. Thirdly, we believe that there needs to be certain minimum standards to protect those workers who have the least bargaining power.

This difference between the two parties was true 100 years ago and it remains true now. We saw it previously in the debate on the Fair Work Bill and we are seeing it here. The opposition have forever been on the lookout for opportunities to do away with the rights of trade unions, with the independent umpire and with the legislated minimum standards. These are precisely the matters which drove Work Choices, which was a key factor in costing the coalition the election in 2007. Many of those opposite know perfectly well that this is what cost them the election in 2007, so they are now torn and conflicted.

The fact is that there are many of those opposite whose mood remains defiant. Deep down in their hearts they still believe in Work Choices, and one of the odd things about their view of the world is that it has led to more regulation rather than less. In the case of Work Choices we saw a massive bill of over 1,000 pages designed to restrict employees, trade unions and indeed employers with yards of red tape. You would think that their view of the world would lead to less regulation but, in fact, it led to more.

The final point I want to make about the history in relation to this issue is that, since the time of the Keating government, Labor’s modern view of the needs of the workforce and needs in workplaces has been that of enterprise bargaining. I believe that the introduction of enterprise bargaining has been a great success. It led to productivity improvements far in excess of those which occurred during the period of Work Choices, and I believe that that is the right way to go for industrial relations in this country—that we look to a cooperative model of industrial relations and we look to a model focused around bargaining at the enterprise level. I commend the bill to the House.