Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697633415085.pdf (Australia)
COMMONWEALTH OF AUSTRALIA Official Committee Hansard SENATE EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Reference: Building and Construction Industry Improvement Amendment (Transi- tion to Fair Work) Bill 2009 MONDAY, 31 AUGUST 2009 MELBOURNE BY AUTHORITY OF THE SENATE THIS TRANSCRIPT HAS BEEN PREPARED BY AN EXTERNAL PROVIDER INTERNET Hansard transcripts of public hearings are made available on the inter- net when authorised by the committee.
The internet address is: http://www.aph.gov.au/hansard To search the parliamentary database, go to: http://parlinfoweb.aph.gov.au SENATE EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Members: Senator Marshall (Chair), Senator Humphries (Deputy Chair) and Senators Bilyk, Cash, Jacinta Collins and Hanson-Young Substitute members: Senator Siewert to replace Senator Hanson-Young Participating members: Senators Abetz, Adams, Back, Barnett, Bernardi, Birmingham, Mark Bishop, Bos- well, Boyce, Brandis, Bob Brown, Carol Brown, Bushby, Cameron, Colbeck, Coonan, Cormann, Crossin, Eggleston, Farrell, Feeney, Ferguson, Fielding, Fierravanti-Wells, Fifield, Fisher, Forshaw, Furner, Hanson- Young, Heffernan, Hurley, Hutchins, Johnston, Joyce, Kroger, Ludlam, Lundy, Ian Macdonald, Mason, McEwen, McGauran, McLucas, Milne, Minchin, Moore, Nash, O’Brien, Parry, Payne, Polley, Pratt, Ronald- son, Ryan, Scullion, Siewert, Sterle, Troeth, Trood, Williams, Wortley and Xenophon Senators in attendance: Senators Abetz, Bilyk, Cash, Collins, Fisher, Marshall and Siewert Terms of reference for the inquiry: To inquire into and report on: Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2009 WITNESSES BARRETT, Mr James David (Jim), Associate Director, Construction and Infrastructure, Australian Industry Group; and Executive Director, Australian Constructors Association.................... 24 BOWTELL, Ms Cath, Industrial Officer, Australian Council of Trade Unions ......................................... 9 BREWIN, Philip, Accredited Specialist, Workplace Relations, Nevett Ford, Law Institute of Victoria................................................................................................................................................................ 2 CALVER, Mr Richard, National Director Industrial Relations and Legal Counsel, Master Builders Australia ............................................................................................................................................ 41 CULLY, Mr Peter James, Branch Manager, Workplace Relations Legal Group, Department of Education, Employment and Workplace Relations ...................................................................................... 58 DALGLEISH, Mr Ross, Deputy Commissioner, Legal, Office of the Australian Building and Construction Commissioner............................................................................................................................ 67 GREGORY, Mr David, Director, Workplace Policy, Australian Chamber of Commerce and Industry............................................................................................................................................................. 16 HARNISCH, Mr Wilhelm, Chief Executive Officer, Master Builders Australia....................................... 41 JOHNS, Mr Leigh Andrew Hyland, Deputy Commissioner, Operations, Office of the Australian Building and Construction Commissioner..................................................................................................... 67 LAWRENCE, Mr Jeff, Secretary, Australian Council of Trade Unions ...................................................... 9 LLOYD, the Hon.
John, Commissioner, Office of the Australian Building and Construction Commissioner ................................................................................................................................................... 67 MAMMONE, Mr Daniel, Manager, Workplace Relations and Legal Affairs, Australian Chamber of Commerce and Industry ............................................................................................................ 16 MAYNARD, Mr Michael, Group Manager, Workplace Relations Implementation Group, Department of Education, Employment and Workplace Relations ............................................................ 58 MOLNAR, Mr Chris, Partner and Accredited Specialist, Workplace Relations, McKean Park Lawyers, Law Institute of Victoria................................................................................................................... 2 NOONAN, Mr David John, National Secretary CFMEU Construction and General Division ................ 48 QUINN, Mr Gregory Denis, Managing Director, Hutchinson Builders ..................................................... 32 RIDOUT, Mrs Heather, Chief Executive, Australian Industry Group....................................................... 24 ROBERTS, Mr Thomas, Senior National Legal Officer, CFMEU Construction and General Division.............................................................................................................................................................. 48 SMITH, Mr Stephen, Director, National Workplace Relations, Australian Industry Group .................. 24 THOMPSON, Mr Glenn Andrew, Assistant National Secretary, Australian Manufacturing Workers Union ................................................................................................................................................. 48 WILLING, Mr Jeff, Branch Manager, Building Industry Branch, Department of Education, Employment and Workplace Relations.......................................................................................................... 58 Monday, 31 August 2009 Senate EEWR 1 Committee met at 9.02 am CHAIR (Senator Marshall)—I open this public hearing of the Senate Education, Employment and Workplace Relations Legislation Committee.
On 18 June 2009, the Senate referred to this committee an inquiry into the provisions of the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2009 for report to the Senate by 10 September 2009.

The bill provides compliance arrangements for the building and construction industry.

It abolishes the Office of the Australian Building and Construction Commissioner and creates the Office of the Fair Work Building Industry Inspectorate.
It removes building-industry-specific laws which provide higher penalties for breaches and broader circumstances under which industrial action attracts penalties.

The bill introduces a number of safeguards in relation to the use of the power to compulsorily obtain information or documents.

It also creates an independent assessor, who may determine that the examination notice powers will not apply on a particular project.
The bill retains the Office of the Federal Safety Commissioner and its related occupational health and safety accreditation scheme.

Witnesses appearing before the committee are protected by parliamentary privilege.

This gives them special rights and immunities, because people must be able to give evidence to committees without prejudice to themselves.

Any act which disadvantages a witness as a result of evidence given before the Senate or any of its committees may be regarded as a breach of privilege.
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 2 [9.03 am] Senate Monday, 31 August 2009 BREWIN, Philip, Accredited Specialist, Workplace Relations, Nevett Ford, Law Institute of Victoria MOLNAR, Mr Chris, Partner and Accredited Specialist, Workplace Relations, McKean Park Lawyers, Law Institute of Victoria CHAIR—Welcome.

Thanks you for your submission.

Do you have anything to say about the capacity in which you appear today?
Mr Molnar—I am here today on behalf of the Law Institute of Victoria.

I am a partner of McKean Park Lawyers.

Mr Brewin—I also appear on behalf of the Law Institute of Victoria.

I am a director or partner in the firm Nevett Ford lawyers.

CHAIR—Thank you.

We have received your submission.

Are there any additions or alterations that you would like to make to your submission?
Mr Molnar—No, there are no additions or alterations other than to say that, just looking through it this morning, we noted that on page 3 under part 6, which is headed ‘Section 50(2)’, where it says, ‘The LIV submits that section 50(2) of the bill, which allows the director a period of three months to issue an examination notice,’ it should read ‘a period of three months to give an examination notice’.
It is obviously the AAT which issues the examination notice, and then it is up to the director to give the examination notice to the person who will be subject to the examination.

So, instead of the word ‘issue’ in the second line, could we substitute the word ‘give’ for that.

CHAIR—Which section was that again?

Senator ABETZ—It is the second line in section 6.

Mr Molnar—Correct.

Instead of the word ‘issue’, substitute the word ‘give’.

CHAIR—Thank you.
CHAIR—Thank you.

We invite you to make some opening remarks to the committee, to be followed by questions.

Mr Molnar—Thank you.

Just by way of background, the Law Institute of Victoria is the professional body representing most solicitors in this state.

It has over 13,000 members.

We are both members of the workplace relations executive, which runs the Workplace Relations Section.

The Workplace Relations Section has in excess of 1,000 members.
Part of the role of the Workplace Relations Section is to consider existing legislation and proposed legislation and to put forward submissions where it believes it to be appropriate to make submissions.

This submission has gone through the Workplace Relations Section executive and has gone through the processes that are there to approve these sorts of submissions on behalf of the Law Institute of Victoria.
The Workplace Relations Section, as you would imagine, is constituted by lawyers who work for various people in all sorts of industries, whether they are employer or employee.

People could have any sort of affiliations, whether they be political or religious affiliations.
So, when the Law Institute and, in particular, the Workplace Relations Section make submissions, the major things that we are concerned with are not so much philosophical policy type questions; we are concerned about issues to do with the law as it applies in a legal sense, and obviously we are concerned about people’s rights to representation.

We are concerned about issues about efficiency.

We are also concerned about issues going to natural justice.
Obviously, the bill before the parliament has a number of philosophical policy sorts of issues, and we do not seek in this submission to make any comment about those.

But, in going through the bill, we have identified a number of issues that we think are important in terms of the rights of people within the system and, to some extent, the operability of the examination process.
It might be useful to simply go through the letter we have written by way of submission very, very briefly, because we appreciate that you have obviously read it.

Just on the front page, under ‘Section 51’, we note that any person who is subject to the examination process proposed by the bill will be allowed a representative, a lawyer, of their choice.
This is different from where the act is at the moment, and the Law Institute certainly thinks it is important that individuals who are subject to the examination process are able to pick the lawyer of their choice and that the ABCC—or, in future, the director—is not able to have an influence on the issue of who represents that person at the examination.

It is a matter of choice for that individual to pick the lawyer of their choice.
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 3 Section 58 deals with the issue of the payment of reasonable expenses.

The only issue here is that we feel that it should be made clear that the expenses to be reimbursed should include the loss of wages or ordinary income.

We believe that the bill should be amended to put that into effect.
We note that that was something that the Wilcox report put forward, and we think it should be made clear in the bill.

Section 52(1) is one of the major parts of the bill.

It leaves the examination process in place, but it has been changed from where it is at the moment.

Our concern here is the penalty which is to be applied in the event of a contravention of this subsection.

The issue we have is that a person contravening this subsection is exposed to a term of imprisonment of up to six months.
We have a concern about that because it is anomalous for a penalty of imprisonment to be provided in an industrial law context.

It is important to take a step back and look at why this examination process is taking place.

It is taking place because there has been some concern about a breach of an industrial law.

Even if at the end of the day there is found to be a breach of that industrial law, that will never lead to a term of imprisonment.
So it seems anomalous that a failure to comply with the examination process leading up to a potential prosecution for a breach should lead to a term of imprisonment, even though the breach itself would never lead, under the current laws, to a term of imprisonment.

It seems to us that that is anomalous in the context of industrial law.

Section 47(1)(d) we are concerned about where it provides that ‘any other method of obtaining information, documents or evidence has been attempted’.

It is very broad.
It is very broad.

It is very extensive.

Inevitably it would lead to dispute as to whether all other methods or any other method have been undertaken.

It would only need somebody to point out, ‘There is one more method that could be applied,’ for that process to be put into dispute.

We would seek that there be some limitation on that.

The limitation that we would put forward, or the qualification, is that only methods which are genuine and reasonable should be under consideration.
On section 59B, ‘Identity cards’, we feel that, whilst the identity cards are there and need to be produced for people to enter premises, inevitably there are a great number of people on building sites.

They could be clients, contractors, advisers or specialists.

There are people from all different types of organisations on a building site.

They obviously talk.


We believe that it is more appropriate for the fair work building industry inspector to be identified on an ongoing basis through some sort of uniform so that, when they talk to anybody on the site that they have entered, that person, as a matter of fairness, knows that they are actually talking to an inspector.

I will talk about section 52 now.


Under this process, once the director has obtained an examination notice which has been issued by the Administrative Appeals Tribunal, at the moment, with the way the bill is drafted, they have a period of three months in which to give the examination notice to a person.

We consider that to be too long.


We feel that, once the AAT member has issued the examination notice, the inspector or the director should proceed in an expeditious manner to give the examination notice to the individual so that that individual knows, as a matter of fairness, that he will be subject to an examination process.

We see that it is appropriate to shorten the period of three months to 28 days.

Part 7 of our submission deals with the independent assessor.
As the committee would be aware, the independent assessor is there to assess whether the examination power is switched on or switched off.

The way the bill is drafted at the moment is that the examination power is switched on until the independent assessor switches it off.

We see that there are a number of issues and difficulties with the notion of an independent assessor, which we have put forward in the submission.
One of the difficulties we see is that, where building industry participants have in the past been well behaved, they are not going to be concerned or worried about an examination because it is most unlikely in those circumstances that the director will seek an examination— because those participants are well behaved.

They are not going to be worried about proceeding to having the powers switched off because they are not worried that there will in fact be an examination notice.
Given that, we do not see that it will necessarily be used all that extensively.

The other difficulty, of course, is that you will potentially end up in a situation, when some building industry participants have the power switched on and some have it switched off, where there may be a motivation for bad behaviour by those people who have it switched off.

It should, I think, be understood by the committee that bad behaviour can happen very quickly.
It can happen because there is an issue on site and all of a sudden there is a difficulty.

We would have thought that there ought to be uniformity in terms of the approach on the examination notice such that all building industry participants could be subject to an examination process where this switch on, switch off, which to a large extent ultimately will be based on various subjective criteria, poses a difficulty on the building site.

Does my colleague wish to have anything?


EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 4 Senate Monday, 31 August 2009 Mr Brewin—In relation to section 52, which Chris was referring to, the Law Institute’s view is certainly that there ought to be increased monetary penalties rather than imprisonment.

We see that as an appropriate remedy.

I would agree with my colleague that there is a concern in relation to the switch-off power.
It does seem anomalous that, if you were wanting the power to be switched off, one would have to ask why.

If you do not need the power switched off, why have it anyway?

We see that as unnecessary.

That, in our view, is probably the most significant concern in relation to this matter.

Otherwise my colleague Mr Molnar has covered it.

CHAIR—We will go to questions.

I will take you back to the payment of expenses for those who are required to be involved in a compulsory examination.
Employer groups have suggested that this should not occur at all or should not occur if people are uncooperative.

They also question how to ensure cost- effectiveness.

Some have suggested a means test.

Do you wish to expand on the views you have already expressed to the committee on that issue?

Mr Molnar—It would be normal in a court situation, if a person is compulsorily required to attend a court room under subpoena, for that person’s expenses to be covered.
We do not see this situation as being any different to that.

If you are compulsorily required to attend an examination, your travel expenses, your legal expenses and any loss of wages or income, subject to a reasonableness test, ought to be paid.

It is a compulsory process and we should not undergo these compulsory processes, which in the industrial law area are relatively unusual, without the individual who is subject to that process being compensated, subject to the reasonableness test.
Mr Brewin—It is certainly my view that a means test would just add another bureaucratic layer to it, and it would often be difficult to ensure appropriate compliance.

In my experience in relation to litigation, it seems to work reasonably well.

CHAIR—Employer groups have also warned that the inclusion of public interest immunity, at section 52(2), could be misused to avoid providing information and to slow investigations.

They argue that public interest immunity is too vague a concept.
What are your views on that?

Mr Molnar—It is not something that has been canvassed by the executive of the workplace relations section, so we would be a little bit nervous about advancing a view and of feeling confident that they would have that view.

We would be more than happy to take that on notice and ask the executive what their view is and get back to the committee on it.

CHAIR—Thank you.
CHAIR—Thank you.

I was just wondering whether you also have a view on section 51 subparagraph (6) which prohibits the director from denying the right of a person subject to an examination notice to discuss information relating to the examination with any other person.

Employer groups have pointed to a risk that witnesses will collaborate to get their stories straight.
Others have submitted that it may compromise an investigation by allowing someone of interest to know what has been said already and, importantly, removes protection from the first person.

Do you have any views on that aspect?

Mr Molnar—Similarly I think that would be a controversial issue, so we would like to canvass the views of the executive and perhaps forward those views to the committee.

Mr Brewin—We could certainly get back to the committee in a timely manner in relation to that.
CHAIR—You will need to because we are reporting fairly soon on 10 September.

Mr Brewin—We do not want to be difficult about that but, appearing on behalf of the institute rather than as individuals, we need to ensure that, because the Law Institute represents a broad church of views, we have at least canvassed, and we are certainly happy to get back to the committee quickly.

We are actually meeting today at lunchtime so we can do that.
CHAIR—On the last issue that you raised with us about the switching-off process.

The government has indicated that it actually supports one set of laws for all working people, but there is a transition to that process in the building construction industry that wants to be seen to be rewarding good behaviour to get back to the norm.

You seem to have argued a contrary view that that does not matter because, if there is demonstrated good behaviour, those aspects will not comply.
Given the government’s policy objective to set eventually one set of laws across the board, don’t you think the switching-off mechanism will actually be a useful tool to encourage cultural change and good behaviour?

Mr Molnar—I understand the government’s objective.

The difficulty is that the examination process will be used where there has been bad behaviour, and bad behaviour probably of a serious kind.
I think for building EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 5 industry participants looking at the projects they have going forward, if they have been well behaved and have good relationships, then they are not going to be worried about some examination.

They are not going to be worried about the use of the power for them to be examined.

Even if they are examined, they are probably not going to be worried about it.
It just seems to be unnecessary and something that we query whether it will be utilised at any great degree.

Yes, we do understand the government’s objective.

We would have thought that it is important, if this examination process is to apply, then it will just apply uniformly across the board without what would be a fairly confusing subjective process of switching on and switching off the power.

Senator ABETZ—Thank you very much for your submission.
Can I take you to section 5 of your submission and the second-last line of the first paragraph with the sentence beginning, ‘This protects workers and officials.’ I assume that means union officials.

Is that right?

From self-incrimination.

Mr Molnar—Correct.

Senator ABETZ—Thank you for that.

Can I take you back to the second-last paragraph of section 3 of your submission, where you talk about ‘an examination notice’.
I would not claim to be completely across this legislation but, as I understand it, an examination notice can be served on anybody associated with a sector, so it could be served on a contractor, on an employer.

Is that correct?

Mr Molner—Again, without looking at the precise wording, that is my belief.

Senator ABETZ—As it is mine.


So I am wondering why the Law Institute of Victoria, who tell us that they approached this on a very non-political, non-partisan basis, say: The Bill does not afford these safeguards to construction workers and union officials upon the issuing of an examination notice … Why isn’t there any concern expressed for independent small contractors, small and medium enterprises, employers et cetera in your submission?
If the examination notice, as I understand it, applies to all sectors, why does the institute see it necessary to only concentrate on workers and union officials?
Mr Molner—I would have thought that the comment would apply equally to other persons— Senator ABETZ—It doesn’t in the submission, which attracted my attention because I thought a body that was seeking to be as non-partisan as possible, without an agenda or an axe to grind, would have been willing to indicate that these provisions apply across the board and not only to unions, union officials and construction workers.

Mr Molner—I think that is an omission.


I am sure that, if we went back to the executive and raised this issue, they would say that it would apply equally to the others.

Obviously, the persons who drafted this were just pointing out those particular persons, but— Senator ABETZ—Clearly, they were.

But it leaves out a substantial slab of other personnel who are impacted by this legislation, who are studiously avoided in what is allegedly a non-partisan submission.
Mr Molner—We would just see that as an inadvertent omission.

Senator ABETZ—An inadvertent one.

And, I daresay, you would say that, in section 5 of your submission, where I asked you about ‘officials’ meaning union officials, this is once again inadvertent.

That is the word that the Law Institute of Victoria relies upon in only addressing this from a construction-worker/union-official point of view.

Can I ask you about the processes of the workplace relations executive of the Law Institute of Victoria.
You told us that this had gone through ‘processes’—and, fair enough, you did not tell us how.

Just relatively quickly, can you tell us what those processes are?

Mr Molner—The processes that the— Senator ABETZ—Because clearly somebody would have drafted something and then that gets submitted.

Mr Molner—Correct.

Senator ABETZ—When was that submitted to the executive?

Mr Molner—It would have been forwarded to the executive at a time leading up to when the submission was due, presumably.
This would have been drafted in consultation with a number of people.

It then would have been submitted to the executive.

The executive would have had an opportunity to examine it.

I am happy to take it back to the executive today to clarify that those points you have mentioned would equally apply to other building industry participants.

EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 6 Senate Monday, 31 August 2009 Senator ABETZ—Yes.
It is just a great pity that those other people were inadvertently forgotten, which would suggest that they were not necessarily front of mind, in my respectful submission to you.
I then ask you, in relation to section 5 of your submission: do Criminal Investigation Bureau guys and ATO guys walk around in uniforms that tell everybody, ‘Hey, I work for the ATO,’ or, ‘I’m a plain clothes policeman, but in fact I’m wearing a uniform to make it absolutely obvious who and what I am,’ rather than just having an identity card?
Why the importance of a uniform, which I would have thought would make their task all the more difficult, especially on a construction site, because, if a worker were to be seen talking to somebody in the orange suit or green suit—whatever colour you want it—it would be very obvious that they were talking to somebody who was investigating a matter, which would then lead to potential intimidation?

Mr Molnar—The issue is not one of identification; it is more one of very clear identification.
Inspectors and members of the ATO all need to carry identity cards, and generally it is known if they come into a workplace that they are members of the ATO, the ACCC or what have you.

The difficulty is that on a building site there are a great number of people from different organisations and entities.
To the extent that inspectors come onto the site, it ought to be clearly known that they have the right to be there and potentially that they have certain powers with respect to that particular site so that, if somebody is talking to them, they know that that person is an inspector and has those powers.

Senator ABETZ—So why didn’t the police force, the ATO and the ACCC think that this would be a helpful thing for all of them?
In fact, should even lawyers investigating matters and talking to potential witnesses be wearing uniforms so people know that this is in fact a lawyer talking to them, rather than just slipping them a business card saying, ‘I’m a lawyer trying to get evidence for a particular case’?

Mr Molnar—Those lawyers would not be exercising powers under any sort of particular statute.
I think it could well be an ethical matter for a lawyer not to identify who they are and who they represent in talking to various people in different sorts of contexts.

The police, of course, do wear uniforms.

WorkSafe inspectors do wear uniforms.

Senator ABETZ—But not Criminal Investigation Bureau officers, where it is a lot more serious than a traffic offence where they are pulling you over for speeding or running a red light.

Mr Molnar—But they would invariably identify themselves by some means.
Senator ABETZ—Of course they do—with an identity card, usually.

Mr Molnar—That is right.

Senator ABETZ—Why wouldn’t that be good enough?

You have come up with this, if I might respectfully suggest it, quaint suggestion that a building site is so different to any other work site.

If I might say so, with respect, all other work sites may well have contractors, salesmen, visitors, clients et cetera on site.
So I am not 100 per cent sure as to what is the uniqueness of a building or construction site that would require these people to be identified with a particular uniform.

Mr Molnar—I think the view of the section is just that they should be clearly identified.

I do not think I can take it any further without taking it back to the executive.

Senator ABETZ—Senator Fisher just whispered to me— Senator FISHER—In such dulcet tones!
Senator ABETZ—that it also raises the question that union officials also have certain rights on workplaces: right of entry et cetera.

Will we have Sharan Burrow, Mr Lawrence or whoever starting to wear a particular uniform so that employers can be under no misunderstanding and know exactly who they are talking to?

I would have thought presentation of an identity card or business card would suffice.
It just seems a bit of overkill, and I wonder what exercised the mind of the Law Institute of Victoria to come up with that idea— once again, in circumstances where they inadvertently missed out on any commentary about the small business sector and the contractor sector.

Should union officials wear uniforms?

Senator FISHER—Particularly when some union officials do wear uniforms when they enter workplaces.
Perhaps those who do not, when they are exercising the special rights that come with their right to enter the workplace, raise more questions because of those who do in terms of extending what must be the logic behind your suggestion on this issue.

How does it all hang together, Mr Molnar?

Mr Molnar—Union officials wearing a uniform is not a matter the executive considered.

Obviously it was not a matter that was in the bill, so the executive has not had an opportunity to consider it.
But I am more than happy to take it back to the executive— EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 7 Senator FISHER—They have special rights, as you are suggesting the building inspectorate would have.

Mr Molnar—The focus of the institute was to consider and comment on the bill and the particular powers of the inspector, the director.
We have not as yet had an opportunity, as the issue has not really arisen, to look at whether or not union officials should wear uniforms.

Senator CASH—Thank you, gentlemen, for your submission today.

I note, Mr Molnar, that you said that in your submission you are basically addressing issues to do with the law as it applies in a legal sense.

Mr Molnar—That has been our focus, yes.

Senator CASH—We have had evidence given to us, or evidence will be given to us, in relation to proposed section 39.
There are serious legal questions as to whether this may constitute an impermissible delegation of power from the parliament.

Do you have any comment on the constitutionality of section 39, bearing in mind the institute you are representing?

Mr Molnar—No.

The institute has not considered that issue so I am unable to offer any comment, I am afraid.

Senator CASH—Not a problem at all.


The other issue that has been raised in evidence is in relation to the ability to apply to switch off the powers prior to a building project commencing.

It has been given in evidence that it is impossible to know whether the powers will be needed until the project commences.

How do you see that working in reality?


Mr Molnar—We see it working with some difficulty, and that is why we consider that you should not have the independent assessor and the switching on and switching off; you should just always have the powers available.

As I said before, issues on building sites can develop and build up very quickly.

In those circumstances, if the powers have for some reason been switched off, it is obviously problematic.
I appreciate that under the bill the powers can subsequently be switched on and it can be made retrospective in terms of the examination of past conduct.

But I think the answer is really to have a more uniform, across-the-board scheme where everybody is potentially subject to these examination powers rather than trying to predict what is going to happen in the future.
That is essentially what the independent assessor is trying to do, to predict future behaviour, and in this industry that may well be a difficult task.

Whilst we would not go so far as to say it would be impossible, it would be very difficult to know in advance.

Senator SIEWERT—I just wanted to go to the switch on and switch off powers.

Basically, if I understand both what you have said and what is in your submission, you think they should be off all the time.
Mr Molnar—No, we think the powers should be on all the time.

Senator SIEWERT—Sorry, yes.

The union movement submissions are saying, ‘If you are going to keep coercive powers you have them off and then you switch them on.’ Mr Molnar—If you are going to have these powers, in terms of the practicality and the way they would operate it would be far better just to have them on all the time for everybody, so everybody knows what the ground rules are and can respond accordingly.
Senator SIEWERT—That is if you are going to have them.

In your opening comments and in your submission you said that these are quite strong powers that now relate to industrial matters rather than criminal matters.

Do you think that they are inappropriate?

Mr Molnar—We do not have a view on that.

If you have them, the penalty for failing to comply with an examination notice should not be a term of imprisonment.

We do not believe that there should be this switch- off ability.
We think you should simply get rid of the whole independent assessor, the switch-on, switch-off sort of thing, and anybody in the building industry could be subject to an examination notice.

Senator SIEWERT—What sanctions would you recommend?

Mr Molnar—In lieu of a term of imprisonment, we would say a significant monetary penalty.

Senator ABETZ—What does that mean in the general context?

How many thousands would you put on it?

Senator FISHER—Or tens of thousands.


Mr Molnar—We are not putting forward a particular figure.

Obviously that would need to be assessed in a proper manner in terms of balancing the severity of that.

We have not undertaken that task.

Senator ABETZ—Imprisonment was not a requirement either under the legislation; it was just a possibility.

EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 8 Senate Monday, 31 August 2009 Mr Molnar—Yes, correct.
But to the extent you have that sanction of imprisonment, we say that that should not be there.

However, we would say that there ought to be a significant monetary penalty in the failure to comply.

Mr Brewin—It is the law institute’s view that it ought to be more than what is indicated in the proposed draft which is a maximum fine of 30 penalty units instead of or in addition to a term of imprisonment.

A body corporate that is convicted of an offence may be fined up to five times that maximum.
We say that it ought to be greater than those, but we are not prepared to put a figure on it.

Senator SIEWERT—A number of submissions suggest that the powers have been used disproportionately against workers.

I wonder whether you have had any experience in that area?

Do you have any comments on that?

Mr Molnar—Obviously, I have read the various reports on the issue.

I do not have any comments on that.


No, we would need to go back to the executive for any comment as to whether they had a view on the use of the powers in the past.

Senator SIEWERT—Is it possible for you to take that on notice?

Mr Molnar—Yes, we can take that back.

CHAIR—I want to come back to identification.

The principal point that you are trying to make, as I understand it, is that if somebody is wandering around who has powers that they may or may not exercise, they should be identifiable.
You said that one of the ways to do that was identification by a uniform.

Senator Abetz indicated that if it was a green and orange uniform, it would probably receive some ridicule.

Senator ABETZ—You would spot them.

CHAIR—I know Senator Fisher is cringing right now.

Senator FISHER—Purple and orange would be splendid, Chair!

CHAIR—The point is that people ought to know that this person is there.
Mr Molnar—What might happen is that they might have an identity card and that is around their neck or in their pocket.

They would use that to enter the premises and they might then walk around.

Obviously people would be talking to one another and anybody who is there ought to know if an inspector is there.

They ought to know it is an inspector.

It is a simple proposition.

CHAIR—Thank you for your submission and your presentation to the committee today.

Mr Molnar—Thank you.


EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 9 [9.44 am] LAWRENCE, Mr Jeff, Secretary, Australian Council of Trade Unions BOWTELL, Ms Cath, Industrial Officer, Australian Council of Trade Unions CHAIR—Welcome to the inquiry.

We have received your submission.

Do you have any alterations or corrections to make?

Mr Lawrence—No, Senator.


CHAIR—I invite you to make some opening remarks to the committee, which will be followed by questions.

Mr Lawrence—I will make some brief remarks.

The ACTU submission, which is also lodged on behalf of all the trades and labour councils, attaches our submission to Mr Justice Wilcox as part of his inquiry and therefore that becomes part of the submission.

The committee will of course be well aware that there has been a lot of public controversy about this legislation.
There is no secret that the ACTU has some substantial differences with the government on this legislation.

We start with the overriding principle that there should be one set of laws for all workers.

We believe that with the Fair Work Act and the accompanying legislation there should be equal rights for construction workers.

The major aspects of the ACTU submission are summarised on pages 4 and 5 of the submission.
With respect to the issue of most public notoriety, which is the coercive investigation powers, we remain absolutely opposed to their continuation in this legislation for a number of reasons.

Firstly, they clearly impinge upon the civil liberties and rights of people.

With respect to registered organisations, they impinge upon freedom of association.

There has been a lot said in the press on this debate—in particular about law and order issues with respect to the construction industry.
The ACTU’s position on all of these issues, including issues of violence, is well known.

It is very clear and very firm.

In the construction industry there have been a lot of allegations about this, but very little evidence.

In any event, even if there were some substance to these sorts of issues, the coercive powers are fundamentally irrelevant in dealing with such issues, because they are issues around the regulation of industrial conduct.
We have criminal and civil law that deal with issues such as these.

In terms of their fundamental infringement of human rights and industrial rights, in our view they are oppressive and are of no use in dealing with hypothetical issues around law and order.
We have nevertheless, on the basis that the committee may well recommend some continuation of the coercive powers, suggested some amendments—in particular to enhance the protections contained in the legislation and those that were recommended by Justice Wilcox.

Fundamentally, we think that, although it is a good thing that the bill proposes to abolish the ABCC as a separate institution, the inspectorate should be a division of the Fair Work Ombudsman.
We think that the advisory body that is proposed should be strengthened and, with respect to coercive powers, it should be the independent assessor making a decision to switch them on.

With respect to the role of the President of the ATT, we believe that there are some changes that could be made with respect to the manner in which the order is approved by that member, and in particular the person who is subject to the order should always have the opportunity of appearing.
Finally, there should be more legislative guidance for the independent assessor in carrying out that role.

We acknowledge that this legislation makes some improvements to the current situation.

Of course, the abolition of the ABCC is the first of those improvements.

We believe that it is part of the Work Choices architecture, and therefore it is a matter of principle that, within the context of the new system that has been established by the government, it has no role.
But as I said before we believe that the inspectorate should be part of the Fair Work Ombudsman structure rather than a standalone organisation.

The change with respect to the coverage of the legislation to more properly define the construction industry is, we think, an important improvement that will lead to greater certainty in the industry.

Also, the equalisation of penalties, as compared to the rest of the industrial relations regime is, we think, a beneficial change.
So on balance, notwithstanding our very significant opposition to the continuation of the coercive powers, we would prefer that this legislation be passed rather than nothing happen, if that is the choice.

One of the important reasons is that its not being passed would leave part of the Work Choices structure there in a way that is fundamentally inconsistent with the rest of the regime that the government put in place.
As well as that, this industry needs to move to dealing collaboratively with some very important issues.

It needs to return to a collaborative approach with respect to its industrial relationships—the relationships between unions, employer EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 10 Senate Monday, 31 August 2009 organisations and employers.

It needs to deal with crucial issues of occupational health and safety.
It needs to take steps to deal with issues relating to productivity and skill development.

For those reasons, to get the whole of the industry into a more productive space we think that on balance it would be better for the legislation to be passed rather than for nothing to happen.

Those are our introductory remarks.

There is one additional matter the ACTU wants to place on record and that is to thank John Carter, who is the secretary of the committee.

I understand that John is retiring soon.


He has played a valuable role as secretary of the committee and has always been of assistance to the ACTU and its officers in the preparation and presentation of submissions to this committee.

So, we express our appreciation to Mr Carter and wish him well.

Senator ABETZ—Thank you for your submission and for presenting to us this morning.
Mr Lawrence, I heard you mention the issue of principle; it is on page 10 of your submission under section 6: The government was elected with a mandate that one set of industrial laws should apply to all workers … I think you indicated that in your opening submission as well as a fundamental principle.
How strong a principle is that in relation to textile, clothing and footwear personnel given that we have—I think on a bipartisan basis—passed legislation through the parliament specifically for one group of workers because there was a perceived need that they needed extra protection?

Mr Lawrence—There has been a tradition, as you pointed out, of industrial legislation providing particular regimes for a number of industries in Australia.

Textile, clothing and footwear is one.


Then there are waterside workers, maritime industries and aviation.

So there has been a history of those.

But we are talking about something that is rather different here.

We are talking about a regime that infringes on the rights of a particular group of workers and puts in place a regime of regulation that, in our view, is an infringement on their civil liberties and on their industrial rights.

So I think it is a fundamentally different position.
Senator ABETZ—Would you agree though that those infringements on civil liberties, as you describe them, also equally infringe on the civil liberties of contractors and employers?

Mr Lawrence—That is not the way in which the ABCC has operated.

The ABCC has been an organisation, in our view, which has been a one-sided organisation.

Senator ABETZ—We can talk about and say that the ABCC personnel are biased but I would reject that, but put that aside.
The law, as drafted, applies equally, does it not, with examination notices?

I canvassed that with the Law Institute that it applies equally to employer and employee.

Mr Lawrence—Our preferred position is that any enforcement mechanism, which is really what we are talking about here, should have common principles that apply across the workforce.
That is why we say that we are not opposed to some measure of specialisation but we are opposed to there being a set of laws, especially the coercive powers, that apply just to one set of workers.
Ms Bowtell—Senator Abetz, I think also in operation under the current regime the ABCC and the Fair Work Ombudsman have had an operational arrangement where breaches of industrial instruments, non- payment of awards, et cetera, would be dealt with by the Fair Work Ombudsman and the ABCC would only deal with matters relating to alleged contraventions by unions and their officials.
So while the ABCC has had a statutory authority to use its coercive powers in pursuit of employers who have breached their industrial obligations, the operational arrangements that have been put in place have meant that it has not conducted investigations or inspections of breaches of industrial instruments by employers and has left that work to the Fair Work Ombudsman, who of course has a different set of enforcement and compliance powers.
Senator ABETZ—But in rough terms the matters that have been pursued by the ABCC are—what?—25 per cent against employers, 75 per cent against unions?

Is that a fair sort of summary?

Ms Bowtell—The issue is not just who the target of the investigation is but the nature of the contravention.

I am not aware of any investigations or prosecutions by the ABCC of breaches of industrial instruments—so breach of award or of industrial agreement.
If you look at other industries where the Fair Work Ombudsman does compliance work, we have noncompliance in the order of 40, 50, 60 and 70 per cent, and in some industries 80 or 90 per cent noncompliance, you would expect to find noncompliance of that order in the construction industry as well.

Certainly our affiliates in that industry tell us there is noncompliance by employers of that order.
Yet the ABCC has not conducted any activities in relation to compliance by employers in relation to awards, agreements and minimum standards as far as we are aware.

EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 11 Senator FISHER—Isn’t that law properly the charter of the Workplace Ombudsman under the previous regime effectively?
Ms Bowtell—I think Senator Abetz’s question went to: doesn’t it have its powers in respect to both employers and employees.

If you are looking at noncompliance with the law, then noncompliance by employers is largely underpayments, nonpayments, failure to afford entitlements, et cetera.

So you would expect that, if the ABCC had a charter to investigate unlawful behaviour, it would investigate unlawful behaviour of that type.
Senator ABETZ—My question was in the context of Mr Lawrence’s assertion that people’s human rights had been infringed by this legislation and, if there were such an infringement, the point I was seeking to ascertain was whether it cut both ways, both to employees and to employers.

I think we agreed that that is what the legislation does.
Whether the actual implementation of the legislation is so followed is another argument, which I think we would respectfully have to disagree with each other about but, given the time constraints, I will not pursue that.

In general terms, was the ACTU accepting of the findings of the Cole royal commission into the building construction sector?

Mr Lawrence—No.

To my recollection, there were no prosecutions or subsequent actions that actually came from the Cole royal commission.
A lot of assertions have been made, including on issues around the economics of the industry, and a lot of that material has been canvassed again by Justice Wilcox.

But the short answer is no.

Senator ABETZ—So you would not accept the royal commission’s concerns about possible reprisals against those who gave evidence to the royal commission?

Mr Lawrence—Absolutely not.


Senator ABETZ—So, as far as the ACTU is concerned, there is no culture of fear, intimidation or thuggery in the building and construction sector?

Mr Lawrence—There is no such culture.

Where there have been instances in any industry of what might be termed ‘violence’, the ACTU has had a very firm position and has publicly stood up and dealt with these issues.
There is no doubt that the construction industry has its difficulties in relation to the regulation of wages and conditions, the sorts of structures that are established and subcontracting—all of those issues.

There is no doubt that the building and construction industry is a tough industry, but there is no such culture as you have inferred.

There is no evidence to support it either.

Senator ABETZ—It was not me inferring it.

It was a finding of the Cole royal commission.


That is why I wanted to know whether you agree with the commission’s findings.

Clearly you do not and, therefore, you do not see a need to protect people against potential reprisals for having given evidence to the royal commission.

Mr Lawrence—What we see is a need for people to have equal rights and protections in the industrial system.
Senator ABETZ—Do you agree that, in the 20 or so years up until about 2001, the construction sector had a singular lack of productivity increases?

Mr Lawrence—We would have to look at the detailed evidence that it is there.

What we do know is that the arguments that have been put forward about changes in productivity during the time of the ABCC would indicate there has been very little improvement in productivity.
We say that there is now a need for unions and employers to get together and address fundamental issues of productivity.

Indeed, the unions have attempted to commence a dialogue about these issues.

But that will not be addressed by having punitive legislation such as that which contains the coercive powers.

Senator ABETZ—Thank you for all that.

All I was asking about was the productivity increases, if any, in the construction sector in the 20 years leading up to 2001.
I was wondering if you could point to any genuine increases in productivity from 1981 through to 2001.

Mr Lawrence—I do not have those figures in front of me, but it is well-known that at different times there have been productivity issues in the Australian economy.

I certainly know that over the last 10 years or so, in the period of Work Choices, the productivity result has been generally pretty negative.
Senator ABETZ—Do you accept that, since the introduction of the ABCC, there has been a change in relation to industry behaviour in the building and construction sector?

EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 12 Senate Monday, 31 August 2009 Mr Lawrence—During the period of the ABCC there is no evidence that there has been any improvement in productivity or any positive change in relationships within the industry.
I think what has happened, as has happened also in other parts of the economy during Work Choices, is that there has been a decline in productive relationships within the industry.

What we need to do is get back to consultative mechanisms that deal positively with issues around productivity.

Senator ABETZ—So you would disagree with this statement then, I assume: However, the ABCC’s work is not yet done.
Although I accept there has been a big improvement in building industry behaviour during recent years, some problems remain.

It would be unfortunate if the inclusion of the ABCC in the OFWO led to a reversal of the progress that has been made.

Mr Lawrence—I am assuming that they are the words of Justice Wilcox, although you have not indicated that.

Senator ABETZ—Well spotted.


Mr Lawrence—In the end, Justice Wilcox recommended that the coercive powers be maintained, and that is a position with which we disagree.

Senator ABETZ—So the ACTU disagrees with His Honour Justice Cole and with His Honour Justice Wilcox in relation to the culture that both of them say exists within the building and construction sector?

Mr Lawrence—I think a lot has happened in the industry in that period.

We disagree with the conclusions about the culture.
I must say, Justice Wilcox also did not accept some of the assertions that were being put forward about productivity issues and some of the economics of the industry either, but he did recommend— Senator ABETZ—So we cherry-pick through, do we?

Mr Lawrence—He recommended that the coercive powers continue, and it is well known that that is a position with which we disagree.
Senator ABETZ—Yes, but he believes, does he not, having reviewed the sector, that those coercive powers need to be maintained for exactly the same reasons that Cole recommended that they be implemented some years ago—because of the need to fundamentally shift that culture that the ACTU completely denies exists?

Mr Lawrence—What we believe is that there needs to be a consultative approach within the industry to address fundamental issues of productivity, skill development and health and safety.
I think that is the real task now, rather than continuing with a regime which in fact has had very little result in terms of prosecutions or other practical results in the industry.

Senator ABETZ—Albeit often just having a policeman patrolling the highway reduces the number of people speeding without needing to point to prosecutions for speeding.

So you can say it is a waste of time putting a patrol car on the highway, but I think we know that that does tend to modify behaviour.
Is that not the case as well that, given the new coercive powers, a lot of people have modified their behaviour as a result of the potential use of those powers without them having to be actually used on many occasions?

Mr Lawrence—We need to look at what has happened in the economy and also what has happened in the rest of the legislative regime in order to get a true picture.

So I think just to pick out one particular aspect is misleading.
Senator FISHER—You said that the ACTU, if I got this right, does not oppose specialisation for a particular industry.

Do you support specialisation for this industry?

Mr Lawrence—One of the original proposals in a policy sense was specialist divisions within Fair Work Australia, and I think construction was suggested as being one.

I think hospitality was suggested as being another.
So we are not opposed to there being practical specialisation within the Office of the Fair Work Ombudsman, just as there is practical specialisation within Fair Work Australia and there was in the Industrial Relations Commission.

So we are not opposed to that.

We do not think it is appropriate that a separate legislative body be established.

Senator FISHER—What work is a specialist focus supposed to do and achieve, if you have it at all?
To justify taxpayers’ resources, what are you expecting it to achieve?

Ms Bowtell—The Fair Work Ombudsman, as I understand it, has established some specialisation within his organisation—for example, a discrimination unit that is looking at discrimination matters, a new area for the Fair Work Ombudsman to deal with.
In oc health and safety inspectorates, you often find industry specialists who have an understanding of particular machinery or whatever, and that is useful in that it builds up detailed EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 13 knowledge of the likely compliance issues in an industry.

But because it is integrated into the whole you can maintain a culture across the whole organisation.
You can rotate people so that skills are spread across an organisation and you can direct taxpayers’ resources to areas of most need.

So if compliance issues arose in an alternative industry or in an alternative geographic area, such as the Northern Territory, where the current Fair Work Ombudsman has found significant areas of breach, you would be able to easily move your resources to those areas of most need.
The problem with having a statutorily separate organisation is that you cannot readily shift resources to areas of most need and so, whilst specialisation is useful in a compliance agency, having it within a broad agency so that you can shift resources to address the need is our preferred model.

We think it is useful and you can understand in depth the likely compliance issues in an industry.
There might be certain industries that are vulnerable and that need overlap with the migration authorities—for example, the horticultural industry.

Those specialisations are useful but, within a context that the overarching compliance agency can allocate its resources to the areas of most need, we think that is a good piece of public policy.

Senator FISHER—So specialisation, as long as it is general?
Ms Bowtell—Specialisation, as long as there is a need for specialised skills and as long as that is where the heaviest compliance need exists.

It would be a waste of taxpayers’ money to have a specialist division that had no work to do.

That is why it would be useful for resources to be allocated at the discretion of the overarching body.

Senator FISHER—That is why I think we agree to disagree with what I really see as lip-service to not opposing specialisation in the building and construction industry.
Ms Bowtell—In other contexts we have encouraged the Fair Work Ombudsman to develop specialists within his organisation and, if you read our submissions, discrimination is one of the areas in relation to the review of the Sex Discrimination Act.

We have been very encouraging of specialisation, so where there are particular breaches and compliance issues— Senator FISHER—I am asking about this industry.

Ms Bowtell—As we have said, we do not oppose specialisation.
It is the location of the specialisation that we have issue with.

Senator FISHER—Mr Lawrence, you have spoken about the industry needing to return to the collaboration of the past.

What were the benefits of the collaboration of the past and what do you mean by ‘past’?

Are you talking pre the ABCC?

Mr Lawrence—I am not so much talking about the past but— Senator FISHER—’Return,’ which is a word you used several times, connotes that.
Mr Lawrence—What I said was return to an approach which is one which is focused on some positive initiatives around productivity, skill and so on.

That is a view we have and it is a view that the government has.

The Deputy Prime Minister expressed last week that generally we need to have an approach which is looking at these things in a more proactive manner.
I think the point is that the whole history of the ABCC has really diverted the players in the industry from progress that was made in this area during the 1980s, early 1990s.

Senator SIEWERT—We have been through the coercive powers issue.

I just want to confirm your position is that they should go completely but, in the event that they are kept, as in this act, they should be switched on rather than switched off?

You propose an amendment to reverse?

Mr Lawrence—Yes.
Mr Lawrence—Yes.

Senator SIEWERT—We touched on the Cole inquiry, so let’s go to other issues that the Cole inquiry raised, around OH&S.

It has been a concern of the Greens and me for a long time—the effect that the ABCC powers or the act would have on OH&S on site.

Have you done any work in that area?

Have you noticed any decline in OH&S over the period of the implementation of the act?
Mr Lawrence—Some figures were released last week, or the week before, which indicated that, in respect of the standards that Safe Work Australia had set, or the targets that we had set over the previous 10 years, I think, in a range of industries we had not kept up with those targets.

As I recollect, construction was one of those areas.

We could get the detail of that.

The question of OH&S is a vital issue.

At the moment, there are the proposals about harmonisation of occupational health and safety.
Our particular concerns go to protection of industries such as construction.

If some of the regimes and provisions that have existed in some of the states are not maintained in the harmonised legislation, then we are concerned that standards will further decline.

EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 14 Senate Monday, 31 August 2009 Senator SIEWERT—We can get the figures that were released last week.

I was in the Kimberley and did not see the figures.
Have there been reports from the industry around any decline in safety on site?

Have there been specific instances?

Mr Lawrence—I think the CFMEU, who are appearing before the committee, will be able to answer that without me verballing them!

I am sure they will be able to.

My impression is that it has generally been an area where there has not been improvement.
This of course has been one of the issues that we have continually raised with the ABCC—that they have had a one-sided approach and have not sought to address issues around OH&S or, for that matter, other regulatory issues in the industry, such as cash in hand, subcontracting and so on.

Senator SIEWERT—That is the issue we were touching on earlier, where the focus appears to have been on workers rather than employers and there has been use of the act to look at the other side of the industry.
Is there anything you wanted to add?

I do not want to go over ground that has already been covered by Senator Abetz, but is there anything further that you wanted to add?

Mr Lawrence—Generally, the ABCC’s approach has been the one which has been on a particular aspect of the circumstances that exist in the industry.

We have continually pointed out that it has been a one-sided approach.
There has been a lot of evidence of issues around OH&S that have not been addressed and issues around some of the other problems in the industry that have also not been addressed.

Senator SIEWERT—I just want to go back to the coercive powers and the Law Institute of Victoria’s comments earlier about the use of penalties, imprisonment, on issues around coercive powers.

Their comments were that there should not be imprisonment for breach of industrial law.

Would you support those comments?


Ms Bowtell—Our view is that, before imprisonment could become a penalty, you would have to be found to be in contempt of either a court or an institution.

The problem with the regime, even with the safeguards that are proposed, is that the person is not heard until they are prosecuted for failure to appear, with a penalty of imprisonment hanging over their head.
In industrial law, for all other workers in the country, there is no prospect of imprisonment unless you are in contempt of court.

We think that the same regime should apply to construction workers and construction employers and that imprisonment should only be an available, as it is to all other citizens, if they are in contempt.
The problem with this regime is that you move to imprisonment without having an opportunity to be heard or having an opportunity to explain why you do not wish to comply with the orders.

Senator SIEWERT—I want to go to the ILO convention and seek your opinion on whether you think the bill, as proposed, is consistent with ILO conventions.

Do you believe it would still breach ILO conventions?
Ms Bowtell—I think it would still be found to have breached both the Labour Inspection Convention and the freedom of association convention.

Even with the safeguards, we would expect that the ILO would continue to be critical of the legislation if it were passed in its current form.

Senator SIEWERT—Your position is that you support the bill but you do not think it goes far enough and you want it amended—is that correct?
Mr Lawrence—We are absolutely opposed to the coercive powers and that has been our fundamental position.

We have suggested a range of amendments that we think would improve the position both with respect to the coercive powers and with respect to other issues.

But in the event that none of those amendments suggested were actually accepted, we think it would be better for the bill to be passed as it is now than for it not to be passed.

Senator SIEWERT—Thank you.


Senator BILYK—Further to Senator Abetz’s questions about the productivity increases in the 20-year period, could you tell us about the return in capital that owners might have received in that time period?

I think I read something about it.

Ms Bowtell—We do not have detailed information about this.

If the productivity improvements have been as some commentators suggest, such as Econtech, then costs of construction have not reduced.
So you would have to wonder whether that has led to an increase in the share to the owners rather than to wages.

I think Professor Peetz’s submission goes through in a fair bit of detail the shift between wages and profits in the industry over the period.

I do not have his submission in front of me, but there is no doubt that over the recent years the wages share of the cost of this industry has reduced.

I am not aware that costs have reduced in the sector.
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 15 Senator BILYK—In your submission you state: ... that the level of the penalty in the BCII Act is out of all proportion to the public harm (if any) occasioned by the taking of unprotected industrial action.

Could you expand on that so we can be very clear what your concerns are?
Ms Bowtell—This was an extract from our submission to Mr Wilcox where the issue of whether or not to bring the construction industry under the same legislation as the rest of the workforce was under consideration.

As it currently stands, construction industry participants face much higher penalties than other industries for the taking of unlawful industrial action.

We did an analysis of other types of offences in the Crimes Act and in other areas of public law.
I think they are set out on pages 10 and 11 of our submission.

But it is quite clear that a $110,000 fine is a significant fine in the eyes of the parliaments that enact this legislation.
We have set out things like sex offenders loitering near schools, bomb hoaxes, giving false evidence to royal commissions, recruiting people to foreign armies and trafficking pornography in some Aboriginal communities and so on as the types of activities that we would expect that the community would consider to be very significant matters.

In our view, someone stopping work for 15 minutes over what might or might not be a safety dispute is not in the same realm of unlawful behaviour.
Senator BILYK—So your comments previously about workers across the board having equal rights and protections also should apply to any penalties imposed?

Ms Bowtell—Absolutely, and that is an element of the bill that is very important for us.

The repeal of the differential definition of ‘industrial action’ and the differential penalties would be a significant evening up of the situation for construction workers compared to their employees in other industries.
Senator JACINTA COLLINS—Could we go to the discussion you have around the definition of ‘building work’.

You allude to, as we anticipated, the problems that have occurred in that area, but you go on to suggest that, further to what is proposed, we strengthen the limiting of the definition.

Can you explain to me precisely what you think that proposal achieves.

Ms Bowtell—It really is just making clear that the intention is to remove the off-site manufacture of prefabrication of building materials.
The legislative device that is used in the bill is to remove something from the old legislation and not have it in the new legislation, which is all very well and good for people who knew what was in the old legislation.

We think that when you have a list of exclusions, it is clearer, if you intend to exclude something, to put it in the list of exclusions.

But it is a legislative device argument.

It is not one of enormous substance.


But, given that it is an area where there is still ongoing difficulty and we are having difficulties right now with off-site manufacturers in relation to their compliance with the code and guidelines, it is an area where we think that some strong signal to building industry participants about what is intended would be useful.

Senator JACINTA COLLINS—And then this point at 3.3 about the definition of ‘office’ is pretty much repetition, is it?
Ms Bowtell—It is just a repetition, and you could cut a couple of pages out of this piece of legislation because they are already in the Fair Work Act.

CHAIR—This may be a question better directed to other witnesses, but it has come up twice now so I will put it to you.

It is about, I guess, the balance that you see with the ABCC.
We know from evidence given to this committee during estimates that the ABCC has relied on a memorandum of understanding with the Workplace Ombudsman to do the breaches of agreements, awards and other instruments and therefore concentrate on the areas which you have identified as giving you some concern.

Given that the Workplace Ombudsman no longer exists, there can no longer be a memorandum of understanding, which I guess allows the ABCC to escape its full remit.
Have you seen the ABCC now pursuing breaches of awards, breaches of agreements and breaches of other instruments?

Mr Lawrence—No.

Ms Bowtell—No.

CHAIR—Again, maybe it is a question best directed elsewhere.

Thank you for your submission and your presentation to the committee today.
Proceedings suspended from 10.28 am to 10.46 am EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 16 Senate Monday, 31 August 2009 GREGORY, Mr David, Director, Workplace Policy, Australian Chamber of Commerce and Industry MAMMONE, Mr Daniel, Manager, Workplace Relations and Legal Affairs, Australian Chamber of Commerce and Industry CHAIR—Welcome.

We have received your submission.

Are there any corrections or additions you need to make at this point?

Mr Gregory—No.
Mr Gregory—No.

CHAIR—We invite you to make some opening remarks to the committee, to be followed by questions.

Mr Gregory—Thank you very much for the invitation and the opportunity to be involved this morning as part of the committee’s inquiry into the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2009.

Our written submission, as you have indicated, has been provided to the committee.

We make these brief additional comments by way of introduction.
In her second reading speech on introducing the bill into the parliament, the Minister for Employment and Workplace Relations, the Deputy Prime Minister, talked about the government’s nation-building initiatives as part of the government’s package of stimulus measures.

She also said: … our capacity to deliver on them is dependent on having a safe, productive and harmonious construction sector.
The Deputy Prime Minister also spoke in that speech about the government’s commitment to a strong set of compliance arrangements for the building industry.

ACCI agrees wholeheartedly with the Deputy Prime Minister but at the same time we are genuinely concerned that some of the proposals for change in the current bill have the potential to put at risk, to jeopardise, some of the necessary arrangements—that we acknowledge and support—that the government wants to see in place.
It is an unfortunate fact that intimidation, threatening behaviour, disregard for the law and worse have long been part of some elements of the building and construction industry.

I emphasise ‘parts’ of the industry, again as the Deputy Prime Minister said in her speech, when she referred to ‘pockets of the industry where people think they are above the law, where people engage in intimidation and violence’.
We are certainly not tarring the entire industry with that particular brush, but it has long been acknowledged, particularly in this state, in Western Australia and in other parts of the industry, that there have been situations of the kind that I refer to that have been longstanding and difficult to deal with.

As this committee would be aware, there have been numerous inquiries, investigations and royal commissions, really going back to 1982 and the Winneke royal commission into the BLF in Victoria.
There have been a range of subsequent investigations and inquiries looking at the sorts of issues that we have referred to.

There have been various responses following from those various inquiries, a range of different things.

There is still indeed in Victoria a building industry disputes board in place.
A range of responses have developed, in large part based on the fact that the Industrial Relations Commission traditionally has not seemed to be able to effectively respond to the sorts of issues in the industry that we have referred to.

Having said all of that, it seems that very few, if any, of those responses had had any real impact, in terms of providing a real response to the sorts of behaviour that we have talked about, until such time as the recent establishment of the ABCC.
That body, in our view, has been universally acknowledged as having had a dramatic impact upon the industry and upon the sorts of behaviour and attitudes that we and the Deputy Prime Minister have spoken about.

That impact has been quantified in a range of different ways: dramatic reductions in lost time in the industry and dramatic improvements in productivity and efficiency in the industry estimated at being worth more than $5.5 billion per annum.
Whilst the industry is certainly in many areas still a tough and demanding one to work in, it is now, in our submission, an industry that is characterised by a much greater sense of predictability and certainty than has been the case in the recent past.

Clearly, there are still issues.


Recent reports about issues to do with the Westgate Bridge and the Royal Children’s Hospital, here in Victoria, and about situations in Western Australia as well would indicate that there is still a way to go in achieving sustained change in culture and behaviour.

Those sorts of changes are still to be cemented in place.

Indeed, as this committee would be aware, the ABCC still has 70 current investigations in the pipeline.
There are still, I understand, around 25 matters still before the courts at the moment.

So, whilst the current situation is not by any means perfect, we do believe that in large part the genie is back in the bottle.

We would be very concerned about any changes that would put that hard- won position at risk and would create the potential for a return to the bad old days.
We are already concerned EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 17 about the anecdotal evidence that we hear from building sites here in Victoria and elsewhere about unions considering themselves to be ‘back in town’ post February 2010, when the changes associated with this bill are intended to be in place.
In our view, the committee should understand that our position is that these changes are much more than a sheer transfer of responsibility from the ABCC to the specialist Fair Work inspectorate.

Whilst this is part of what is being proposed, there are a range of other changes in conjunction with that transfer of power that do, we believe, threaten what has been established in the way that I have described.
I talk particularly of the proposals to reduce the existing fines and penalties to one third of their existing levels.

I talk particularly of the removal of the industry-specific prohibitions upon unlawful industrial action that currently exist, restrictions upon the use of the coercive interview processes and the mechanism to allow coercive powers to be switched off.
We believe each of those particular changes does significantly have the potential to undermine and to threaten what has been achieved in recent years by the ABCC.

I will leave my opening comments at that.

Obviously, our submission contains an outline of our position.

It contains a series of recommendations at pages 65 to 72.

It also contains a more detailed response to particular aspects of the bill.

CHAIR—Thank you, Mr Gregory.

Mr Mammone, do you have anything to add?

Mr Mammone—No, Chair.


CHAIR—We will proceed to questions.

Mr Gregory, you said to us that you believe there are only pockets of problems and that in general terms you think that the genie is back in the bottle.

Why then do you actually have a problem with switch-off mechanisms applying, which will then bring this to where there has been a demonstrated area or location where the genie has been put back in the bottle and to where the area or location is not part of the pockets of problems as you see them?
Given the government have said that they see the switch-off mechanisms as a way to actually reward good behaviour and as also complying with the government’s overall intent to bring at a point in time all workers into line with the same set of laws, why are you so opposed to the switch-off mechanisms?

Mr Gregory—I could perhaps answer that question by making a comment at the outset.

I have spoken about four particular areas that we have concerns about associated with the transfer of powers from the ABCC.
I have talked particularly about the reductions in fines and penalties, the removal of the industry-specific prohibitions on industrial action and the restrictions upon the use of the coercive powers.

You have also mentioned the switch-off provisions.


Of those four, I would probably say that in my view, whilst the mechanism to enable the coercive powers to be switched off is the one that has probably attracted most of the attention, out of those four it is probably the least significant potentially in terms of what its impact might be.

So I make that point by way of putting those particular provisions in context.

They are important.
They are important.

But if parties are acting and behaving appropriately, then they really have nothing to fear from the existing legislation or indeed from anything that might come in the future.

If they are behaving appropriately and are abiding by the law, then they have nothing to fear from the particular legislative provisions that exist at that time.
But having said that and given that situation, I ask this: why do we need to bother about having a mechanism that enables those particular powers to be switched off in the way that you have described?

As I have said, if people are behaving appropriately they have nothing to be concerned about in terms of the operation of the existing framework.
CHAIR—It has been put to us that the ABCC as it is constituted at present really does not go to the issue of breaches of awards, breaches of agreements and other non-compliance matters such as, say, particular superannuation, sham contracting and other arrangements.

That is actually something that, through a memorandum of understanding, is being carried out by the former Workplace Ombudsman.
I suspect, and I guess I will get an answer to this later in the day, that that memorandum of understanding probably has not been transferred given that the Workplace Ombudsman no longer exists.

Are you happy that those power be used to investigate breaches of awards, breaches of agreements and other non-compliance matters in the industry?

Mr Gregory—Are we happy that they be investigated by the ombudsman?
CHAIR—No, by the ABCC or the successor in Fair Work Australia, which would have under the act the powers that we are discussing.

It would still have the coercive powers.

It is just that there are what the government says are some checks and balances and safeguards to protect them from any misuse or perceived misuse.

Mr Gregory—I do not have a particular problem with those functions being exercised in that way.
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 18 Senate Monday, 31 August 2009 CHAIR—What do you say is the compliance level in the industry?

You have identified, quite correctly I think, that it is a tough and demanding industry with fortunes made and lost in that industry.

What do you think is the level of noncompliance with awards, agreements and other instruments in the building and construction industry?

Mr Gregory—It is difficult.


I could not indicate a percentage figure or make any comment about the extent to which there is noncompliance.

There are issues from time to time in a range of different industry sectors in terms of noncompliance with particular provisions.

We have a particularly complicated framework of industrial relations regulation that generally does not necessarily make it easy for parties to understand what their obligations are.
I do not say that by way of providing an excuse for them.

But there are issues from time to time.

We are certainly not supportive of any parties, whether they be employers, unions or employees, that are deliberately seeking to flout their obligations under prevailing industrial arrangements.
CHAIR—If a death or serious injury occurs on a building site, what is wrong with the other workers on that same site who are working in the same environment wanting to know virtually immediately what occurred that led to the death or serious injury in order to decide for themselves whether they are actually working in a safe environment?

Mr Gregory—I have been personally involved in the circumstances surrounding a death in a workplace.
Obviously it is a particularly distressing situation for both the direct family members of the person involved and for people who work in conjunction with that person.

I think employees have a legitimate entitlement, where they are closely associated with those sorts of activities, to understand the circumstances in which the situation has occurred.

Having said that, individual employees are not always in the best position to make investigations or try to understand what has occurred.
That is often best left to people with particular expertise or those who might have been most closely involved.

Whilst I do not downplay the significance of the event, it does not necessarily mean that everyone who is in some way connected should be able to take into their own hands the decision to investigate what has gone on.

There will be a range of different responses depending on the particular circumstances in any individual matter.

CHAIR—I accept that.


I am just trying to get your opinion about the reasonableness of it.

I understand what you have said—that it depends on how complicated the issue is.

But the people you are suggesting it is best left to are the same people who are actually responsible for workplace safety in the first place.

If there has been a serious injury or a workplace death, that means there has been a failure.
If I worked on a building site— and I have done—and a serious injury or death occurred, I would want to know that the environment is safe.

I would not want to work in that environment until I had some assurances or some understanding of what went wrong in the first place.

Mr Gregory—You used the word ‘reasonableness’.


But when you have a very large building site and a very large number of people involved, does that mean that every individual in that environment can suddenly and of their own volition decide on a particular course of action?

I do not necessarily accept that that should be the case.

In the tragic circumstances you have described, there will be a range of reactions and responses, but that needs to be underpinned by reasonableness.
I do not think that gives every individual the ability to determine for themselves what they decide to do.

We have seen too many situations in the past—not just where there is an unfortunate event that involves the death of an employee, but also in a whole range of other circumstances—where people have taken situations into their own hands.

They have walked off building sites and all sorts of things.

I do not believe by any means that that is an appropriate response.
Senator CASH—Thank you, gentlemen, for your submission today.

I would like to get two points of clarification before I commence my questions.

Is occupational health and safety a state responsibility?

Mr Gregory—Predominantly.

Senator CASH—Under the proposed legislation, what is happening with the Office of the Federal Safety Commissioner?

My understanding is that the office is being retained.

Mr Gregory—Yes, it is.


Senator CASH—What was Justice Wilcox’s recommendation in relation to the switch-off powers?

Mr Gregory—He did not make a recommendation with regard to those provisions.

Senator CASH—He did not recommend the switch-off provision?

Mr Gregory—That is correct.

EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 19 Senator CASH—You stated that you had a concern in terms of reducing existing fines and penalties.
You said that that would significantly undermine or threaten what has been achieved by the ABCC.

While the legislation might reduce the fines or penalties, the fact remains that they will be consistent with other industries.

Why is that not sufficient?

Mr Gregory—I talked about the reduction in fines and penalties as one of the four matters I referred to in terms of issues that cause us concern.
They are now being brought back to the level of the fines and penalties that exist for corporations and individuals under the fair work legislation.

It is certainly legitimate to ask why the building and construction industry is being treated differently.

I can only respond by saying the building and construction industry is being treated differently because it is different.

It has historically been different.


Particularly in Victoria and Western Australia, and in other parts of Australia, there have been endemic problems and issues associated with the industrial relations climate in that industry that we do not find in any other industry sector.

This industry is different and, therefore, there have been a range of different responses that have attempted to deal with those sorts of differences.

But it is not only different in an industrial relations context.
There are different redundancy provisions in the industry.

There are different superannuation provisions in the industry.

There are a range of different provisions in the industry because the industry is different in a range of different ways.

In Victoria there is a Building Industry Disputes Board.

That board was established because the industry’s problems are different, difficult to deal with and not capable of being dealt with by the Industrial Relations Commission.
That was a state government response to the different nature of the building and construction industry in Victoria.

I can only say that we continue to support a higher levels of fines and penalties in the building industry because we believe that response has been an effective part of what the ABCC has been able to offer to the industry to deal with the different issues that exist in the industry.

That is why we say those different provisions should continue to be maintained.
Senator CASH—I need to explore that with you.

We have just heard from the ACTU.

They do not accept the findings of the Cole royal commission, they do not accept Justice Wilcox’s negative findings in relation to the industry and they argue that we should have one set of laws for all workers.

But what I am now hearing from you is that this industry is different and we do require a different set of laws.

How do I determine what evidence I am going to accept at the end of the day?
Mr Gregory—I can only suggest that you look at the Cole royal commission—the various reports and the more than 200 recommendations; that you look at what the Wilcox inquiry had to say about the problems in the industry; that you look at the acknowledgements from the Deputy Prime Minister herself and, I think, from others in the government as well, about the ongoing issues that exist in parts of the industry; and that you go back and look at preceding royal commissions that have looked at aspects of the building and construction industry.
I cannot really say a great deal more than that.

Senator CASH—So you would say that there is a body of evidence to support your proposition that there is a culture of fear and intimidation within the industry and that, as a result, there is a requirement for a separate set of laws?

Mr Gregory—I would say that the evidence of the problems that exist in the industry has unquestionably been made out over a significant period of time.
My view would be that the only issue of concern at the moment is how we respond to that situation, not whether it has existed in the past or continues to exist at the moment.

Senator CASH—Recommendation 3 in your submission states: If the ABCC is to be subsumed into a new agency, the Director of the agency should operate as separately and autonomously as the existing Australian Building and Construction Commissioner currently does.

John Lloyd has raised with us the issues around diminished independence.
What are your concerns in relation to the potential of diminished independence?

Mr Gregory—Our fallback position in terms of the current bill is that if the ABCC as it currently exists is not going to be continued—and it would certainly be our preferred position that it does continue if it is to be transferred in the way that the bill suggests—then the new agency should operate with the same autonomy and authority as the ABCC currently has.
Our concerns in that area go to issues to do with the use of coercive powers and other areas where it is proposed that some checks and balances be put in place.

The speed with which the ABCC has been able to respond to issues has been one of its important characteristics, and we would have concerns if mechanisms are going to be put in place along the way that delay that quick response.
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 20 Senate Monday, 31 August 2009 I have already spoken about some of the other mechanisms that have existed in Victoria in the past—the disputes board and others.

I think they were established in large part because of the perceived need to be able to respond quickly to problems.

We are obviously talking about projects here that are often massive in size, where the costs inherent in delay increase very quickly.
There is a need for speedy responses to be a hallmark of any sort of dispute resolution procedures in the building and construction industry.

We have some concerns that those speedy response mechanisms are going to be diluted by the proposed bill.
Senator CASH—If I could just turn to growth in productivity within the building and construction sector, we have heard evidence from the ACTU that: A fourth myth, adopted by the Cole Royal Commission, is that union activity in the industry undermines economic growth and productivity.

A related myth, propagated by the authors of the Econotech report … is that that the introduction of the BCII Act regime has boosted growth and productivity.

I then turn to your submission.


In relation to productivity you say: Productivity improvements in this industry should be a key consideration before regulatory change is adopted.

The evidence that you put forward completely contradicts the evidence given by the ACTU.

Again, how do I reconcile your evidence that there has been an increase in growth and productivity since the ABCC was introduced with the ACTU’s evidence that this is a myth?
Mr Gregory—Again, they can try and discredit the studies that have been done but, as you have indicated, those studies are out there and they do indicate quite significant improvements in productivity and efficiency on an annual basis over the past four or five years, since the ABCC has been involved.

I think you would also be aware, though, of many of the individual comments that have been made by industry participants, particularly employer/industry representatives.
I am not talking here about employer organisations but senior people within major construction firms in this country.

Call it anecdotal, if you like, but their comments are universally supportive of the gains, the improvements, the certainty, the predictability that have been brought to the building and construction industry in recent times.

Whilst others might have a different view, I do not believe there is any strong body of evidence in recent times suggesting that those gains have not been achieved.
And, obviously, to maintain that sort of position is going to be even more important in the immediate future, given the stimulus spending that this government—sensibly, I think—is involved in.

We would hope to see the sorts of gains that have been made in the recent past maintained in place as that additional spending is continued to be rolled out.

Senator CASH—Do you have any comment on the change in the definition of ‘building work’ as proposed under the legislation?
Mr Gregory—It is not an issue that has been raised with us in any great detail as yet, but it does seek to exclude, obviously, some aspects of offsite construction work.

I think that does introduce the potential for problems to develop in those areas.
Offsite construction work often very closely flows into onsite construction work, so I guess we would not want to see that change in definition leading to a more deregulated part of the industry in that offsite area creating problems that then flow back into onsite activity.

Again, whilst it is not one of the priority areas that have been raised with us, it is an area of potential concern.

Our preferred position would be to see the definition remain as it is at present.
Senator FISHER—Breaches of industrial instruments in the building and construction industry, as I understand it, are currently able to be identified by the ABCC commissioner and then forwarded to the Workplace Ombudsman for action or otherwise.

The proposal under the bill, as I understand it, is that that work be done by the so-called specialised cop inside Fair Work Australia.

Do you have comments on that, in a resource sense in particular?

Mr Gregory—The resources of the ABCC?


Senator FISHER—The new inspectorate will be expected to undertake work that, up until now, arguably, has been carried out by the workplace ombudsman.

That will now become, to the extent that it is part of the workload, part of the work of the specialised team inside Fair Work Australia.

Do you have any comments on that?


Mr Gregory—The priority work that we see as most important is the inspections across workplaces around the country, particularly investigating industrial relations issues—issues around disputes, unlawful behaviour et cetera.

That is what we see as the priority focus.


We would have a concern if the new body was given a broader range of powers but not the resources to enable it to be as focused as it should be on what we believe EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 21 should be its priorities.

We would not want to see those inspectors being diverted by activities, such as award agreement breaches, which are now being carried out by the workplace ombudsman.
So, yes, if the— Senator FISHER—Indeed, that is obviously important but it would divert resources, would it not?

Mr Gregory—Absolutely important, as I have said.

We are certainly not supportive of any person, organisation or employer that is not observing their appropriate industrial arrangements.
But, in terms of the priorities for this particular organisation that we are talking about today, as I said, we see them as focusing on industrial disputes, unlawful behaviour and the sorts of activities that we have spoken about in the context of the building and construction industry.

We would not want to see inspectors diverted from those types of activities by an additional range of other important but less important responsibilities.
Senator FISHER—My final question is around inappropriate behaviour by union officials, to the extent that that may occur in this industry.

There has been a fair bit of discussion about the extent to which industrial action by workers and indeed by employers is addressed by the current laws and will be addressed by the bill.

To what extent is inappropriate conduct in this industry by union officials addressed by the current law?
What is your view of the extent to which inappropriate conduct by union officials is addressed by the current law versus the extent to which it will be addressed under the bill?

Mr Gregory—In large part our concerns go to the ability to respond quickly to inappropriate action where it is occurring, as we have commented about.
Looking at the responses that exist under our traditional industrial relations framework, a series of steps have to be gone through before significant, speedy responses can be put in place.

The current framework just provides an ability to respond in a much quicker, more proactive way than I guess our conventional industrial relations system allows for.
As I say, we think that has been an important part of the framework that has existed in response to the problems that have been perceived to exist in the building and construction industry.

Again, we will be concerned if that situation no longer exists under the current bill.

Senator FISHER—Thank you.

Senator ABETZ—Does the current definition of ‘building work’ under the legislation include mining and extraction activities?

Mr Gregory—I am not too sure of the answer to that question.
Senator ABETZ—I just want to know because specific exclusions from the definition of ‘building work’ are being suggested in relation to on-site and off-site work.

Mr Gregory—The current definition does not include the following: drilling for extraction of oil, natural gas or minerals.

There are certainly some exclusions in that area.

Senator ABETZ—Yes.
Senator ABETZ—Yes.

On the question of building sites, let us say, where prefabricated concrete walls or partitions are made off site, that would be, at least for your members, part and parcel of the total activity of the construction site because the delivery of those prefabricated materials on time is a vital component, one would assume, of the totality of the construction project.

Mr Gregory—Absolutely critical.


I think the definition we are talking about now will still continue to encompass work that is carried out in conjunction where it is adjacent to a construction site.

But as you said, Senator, where that work is carried out off site and where those materials are then required to be transported to the site, it is absolutely critical that those sorts of deliveries occur within the time frame for that particular construction project.
As you would obviously be very well aware, any project like that is the product of a whole range of integrated things that are occurring in conjunction.

Delivery of appropriate materials to the site in accordance with that time frame is a critical aspect of any building project.

Senator ABETZ—So, if I had a concrete prefabrication plant, what union coverage might I expect of my workers should they avail themselves of union coverage?
Mr Gregory—There could be different unions with coverage of that particular work.

It could be the CFMEU; it could be the AWU.

There could be other unions also involved in aspects of that particular work.

Senator ABETZ—It is interesting you mention the CFMEU.

That has been one of the unions that have been mentioned on a number of occasions by the Cole royal commission and by others who have commented on the sector.
So, if it has coverage of membership on the actual building site and the off-site plant, it would then have the opportunity to engage in activities on the off-site plant which it would not be allowed to engage in on site but which would still cause exactly the same sort of disruption as it would have wanted to cause if it had been allowed to undertake those activities on site.
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 22 Senate Monday, 31 August 2009 Mr Gregory—I think the change in definition that has been raised by the committee this morning does create that potential.

It does create a situation where unions or a group of employees could perhaps exert some additional leverage through activities associated with that off-site business.

That then may impact upon the actual building project itself.

I think that is a fair summation.


Senator ABETZ—Are you aware of the total earnings of the construction sector for 2006-07 according to the ABS?

Mr Gregory—In terms of the percentage of the Australian economy that it makes up?

Senator ABETZ—That will be a good figure.

It was not exactly what I was asking, but let us try that.

Mr Gregory—The industry, I think, employs around eight per cent of the Australian workforce.

Is it 12 per cent of GDP?

I should know the answer to that question.


It is obviously a major part of the Australian economy, in terms not only of its direct activities but of all the ancillary supply functions and whatever else is provided to the industry.

It is a massive part of the Australian economy and, as I have said, one that is coming into even sharper focus through some of the particular spending that is being targeted at the moment.
Senator ABETZ—I am looking at page 17 of your submission, paragraph 57, where you say: ACCI did not accept the material on p.7 of the Wilcox J Discussion Paper which states as follows: Then there is the second paragraph in quotes—have you got that?

Mr Gregory—Yes.

Senator ABETZ—It talks about $71.2 billion being the estimated value of construction work in 2006-07.

For the purposes of the debate, do you accept that figure?

Mr Gregory—Yes.
Mr Gregory—Yes.

Senator ABETZ—So you were not taking issue with the ABS view in relation to that figure, you were taking issue with other matters on page 7?

Mr Gregory—That is correct.

Senator ABETZ—And so you would adopt the figure of the ABS that there was an estimated total value of construction work in 2006-07 of some $71.2 billion?

Mr Gregory—Yes, that is correct.

Senator ABETZ—That would, I assume, make it a fairly important part of the national economic wellbeing of Australia.
Mr Gregory—It is hard to think of an industry sector that is more important.
Senator ABETZ—In his report, Mr Wilcox stated: All the other Australian statutory authorities holding powers of coercive interrogation are concerned with matters of major public importance: national security, the management of the national economy and national tax system … I would have thought the management of the national economy, especially at the moment with the construction sector putting in $71.2 billion, might just potentially fall into the category of being an important part of the management of the national economy.
Mr Gregory—Coercive powers do exist in a range of other areas, apart from the building and construction industry.

All of the focus seems to have been on those powers in this industry, but they are a component of a range of other government agencies and bodies.
There are a number of those agencies—while not by any means discrediting the work that they carry out, but those powers exist with regard to other areas that, in my particular view, are certainly not necessarily more important than the particular issues associated with the building and construction industry sector.
Senator ABETZ—He goes on to say: … relevant to an investigation concerning conduct that may not be, and usually is not, a criminal offence; but merely— and I stress the word ‘merely’— a contravention of an industrial statute or industrial instrument.

I daresay your members and others that fall foul of the tax laws would like it to be interpreted that it was just ‘merely’ a contravention of some tax regulation and not something that might send somebody to prison for ‘merely’ contravening tax laws.
But we know that certain highfliers do go to jail for breaching tax laws.

Mr Gregory—Yes, that does happen from time to time.

CHAIR—Thank you for your presentation to the committee today.
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 23 [11.29 am] BARRETT, Mr James David (Jim), Associate Director, Construction and Infrastructure, Australian Industry Group; and Executive Director, Australian Constructors Association RIDOUT, Mrs Heather, Chief Executive, Australian Industry Group SMITH, Mr Stephen, Director, National Workplace Relations, Australian Industry Group CHAIR—Welcome.
We have received your submission in what has become the very standard format from AiG.

I have to keep turning the book around each time we get one of yours.

Do you have any alterations or corrections to make?

Mrs Ridout—No.

CHAIR—All right, then I invite you to make some opening remarks to the committee to be followed by questions.

Mrs Ridout—Thank you very much.


It is good to be here and have the opportunity to express our views on the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2009.

In our view it is essential that legislative amendments to implement the government’s construction industry workplace relations policies should not lose sight of the reforms of the Cole royal commission.
The reforms introduced after the royal commission have largely removed the unlawful and inappropriate conduct that permeated the industry and which cost project owners, including governments, employers and the Australian community, vast sums.

The industry has never been a better place in which to work and invest, as is evident in the current low level of industrial disputation, high wage growth and higher productivity.
However, whilst behaviour has changed, in our opinion a new culture has not yet been achieved.

The industrial laws arising from the royal commission treat employers and employees in the construction industry differently to those in other sectors.

The different approach reflects the fact that behaviour in the construction industry was so far removed from the standards in other industries that strong measures were required.
We are hopeful that at some point in the future the special provisions applying to employers and employees in the industry may be able to be removed, but not until a new culture has been achieved and conduct in the industry reflects the standards of a contemporary Australian society.

The compulsory examination powers are still clearly needed, as found by Justice Wilcox.

Under the bill, the powers will be subject to very significant and substantial safeguards.
We believe that some important amendments need to be made to the bill to ensure that the reforms which have been so vital to the industry are not lost.

These amendments include the following.

Firstly, the provisions relating to the independent assessor need to be deleted.

This aspect of the bill is inconsistent with the recommendations of Justice Wilcox.

Secondly, the five-year sunset provision applicable to the compulsory examination powers should be deleted and replaced with a review after five years.
A review after five years, say through a Senate committee inquiry, is appropriate.

But a provision which automatically removes the powers after five years unless further legislation is passed by both Houses of Parliament in our view is not appropriate, and a more cautious approach is required.

Thirdly, the existing high penalties which apply to building industry participants—both sides—for breaches of industrial law should be retained, given that an enduring change in behaviour has not yet occurred.
It would be risky to reduce minimum penalties to only one-third of what they are currently proposed to be in the bill.

Fourthly, the fair work building industry inspectorate needs to focus upon what it should do, which is ensuring appropriate and lawful industrial behaviour and preventing unlawful industrial action, similar to the ABCC.

It should not have its resources diverted to dealing with underpayment claims, which are best addressed by the Fair Work Ombudsman.
If the fair work building industry inspectorate powers prove to be ineffective, the risks associated with industrial lawlessness will again be priced into construction contracts at great cost to project owners, including government and the Australian community.

The amendments which we have proposed would result, we feel, in a more balanced and workable piece of legislation.
I would like to conclude my remarks by also putting on the record our gratitude to the secretary of this committee, John Carter, who we understand will be retiring shortly.

We have had a long involvement with Mr Carter, given our many appearances before this committee.

His professionalism and assistance which he has given to us over the years has been much appreciated.

We wish John and his family all the very best in the future.

We are happy to take questions.


EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 24 Senate Monday, 31 August 2009 Senator CASH—It is good to see you again.

Thank you for your submission.

Can I just take you to the switch-off powers.

One of the comments you make in your submission is: Under the Bill, applications to the Independent Assessor to “switch off” the powers can be made before a project even commences.
... Before the commencement of a project it is impossible to know whether the powers will be needed.

...

Unless the Bill is amended, unions are likely to make an application to the Independent Assessor ... before the start of every project.

What evidence do you have to support that final statement?

If the powers are switched off prior to a project commencing, what do you see the impact of that actually being?
Mrs Ridout—My colleagues might like to comment on it further, but the practice of the industry in the past would suggest that that is exactly what would happen.

But, also, if they are switched off before they may be needed exactly at the time that they would be required.

For example, a project will start and then problems will arise of the sort we are concerned about and the powers will not be there to address them.
When the project is on foot is exactly when they are needed, and when problems arise the powers will be there to deal with them.

We are also concerned that if they are removed before the project is put in place the risk attached to that project would be higher, which will then be priced into the contracts and tenders.

Jim might like to comment as well.

Mr Smith—Those are the key issues relating to the switching off.
But there is another aspect to it—that is, with a significant construction project it is impossible to know at the start of the project all of the building industry participants who are going to participate because work is typically put out to tender progressively in packages.

So the unions and employers working on a project would not be known typically at the start.

That is another important aspect.


Mr Barrett—I will raise the issue that Mrs Ridout raised, which is that when a contractor bids for a job one of the risks that they assess and price is the industrial risk.

You price that risk on the understanding that all of the legislation and the legislative provisions are going to be in place.
To price that job and then find that a party, who may not be a party to the contract, has actually applied to have one of those legislative provisions switched off in my view changes the industrial risk profile of that job.
From a contractors point of view they could rightly be saying to their client that they would like to review the pricing of that provision because they have priced it on certain risks being managed and then one of the provisions that is there to manage that risk has been removed by a party who may not be a party to the contract.

Senator CASH—Could I take you to the definition of ‘building work’ on page 12 of your submission.
You say: It is essential that the pre-fabrication of components on-site, or in a temporary yard or other facility set up by a construction contractor to prefabricate substantial parts of a building or structure (eg.

pre-castings) remain covered.

Under the definition of ‘building work’ under the proposed legislation, those definitions are going to be removed— Mr Smith—This issue has quite a long history with AI Group.
When the original BCII Act was being developed we quite strongly opposed the extension into the manufacturing sector because we were very worried that it would lead to the flow-on of construction conditions into the huge part of the manufacturing sector that is involved in manufacturing building products.

That was our central concern.


Obviously, the legislation as it currently exists does extend that far, but we note that Justice Wilcox has recommended that the definition come back to the traditional concept of on-site work plus these other activities that are very closely aligned.

Even though we have supported that in our submission we do that on the basis of Justice Wilcox’s recommendation.
The extension in the definition of ‘construction’—with the benefit now of years of it having been in practice—has not led to the problems that we foresaw, but we have adopted a position that is consistent with Justice Wilcox’s recommendation.

Mr Barrett—Also, the federal government has recently amended the implementation guidelines with regard to material suppliers.
So this change actually aligns with that and in some respects takes away the inconsistency problems for employers having one set of regulatory rules and a second one that is inconsistent.

Senator CASH—I take you now to the convention of the civil penalty provision.

We have heard this morning from the ACTU that they support the decrease in penalties and fines.
They advocate for a ‘one law for all workers’ proposition and I note that you do not agree with the proposition that the fines and penalties be reduced.

Can you expand on why you say that that change should not occur.

EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 25 Mrs Ridout—Stephen and Jim might like to make some remarks, but we do believe in one rule for all workers as well.

But you have to have exceptions to that rule.


What we have seen in the construction industry over many years is a reason why there should be exceptions, and that has been demonstrated through royal commissions, through the Justice Wilcox review et cetera.

We would prefer that, and we hope that, once the industry really gets its act into gear, these provisions can be removed.
In relation to penalties, the reduction in penalties is quite large, so we are very concerned that that is sending exactly the wrong signal at the wrong time to the participants in the industry.

Mr Smith—One of the other things that has influenced our decision and is important is the view expressed by Mr Lloyd, the ABC Commissioner—in the submission that he made—that this reduction in penalties would have a significant impact.
As Mrs Ridout has said, it is a very big reduction, down to a third of the existing levels.

We think this is an area where caution is needed.

The existing provisions are working effectively and they should be retained.

Senator CASH—Can I just pick up on that comment that this industry is different.
We heard this morning from the ACTU that they do not accept the findings of the Cole royal commission and they do not accept the findings of Justice Wilcox in relation to the alleged bad behaviour in this industry.

Do you have any comment on that?

Mrs Ridout—I think it is unfortunate that they do not accept the findings of a royal commission and a judicial review by one of the people that really understand both sides of the argument on this.

In the end you have got to accept the independent assessors.
We would have had to accept it.

I think they are quite wrong in that regard and they are not doing their members a good service, because a productive, harmonious worksite in any industry is so fundamental.

In all my years, I have never seen such a lawless industry as the construction industry.

It has been improved and we should hang onto those improvements by our chewed-down fingernails.

It would be very unfortunate if we lost all the progress that we have seen made in this industry.
Our members have seen it.

Our members have had to lift their game too.

I think both sides of the argument have participated in improving the performance of the Australian construction industry as a place to work.

A lot of young people did not want to go into the industry.

It was not a pleasant workplace in many ways.

It has improved now.

It is not there finally, it is not totally done, but certainly the changes have been quite profound since these laws have come in.
I do not understand why the ACTU will not accept it.

Mr Barrett—I find it hard to believe, as someone who went through the transcripts of the royal commission each day and the hundreds of stories that were told about working in the construction industry.

You would almost have to be in a state of denial to say that this is the sort of workplace that we would want to work in.

To say that we want to change that is fundamentally important for all the parties involved in the industry.
That is starting to happen.

The job is not done yet, but I think most people who work in the industry would say that this is a much better place to work now.

We have taken large steps to change that notion of it being dirty, dark and dangerous.

Mrs Ridout—This is not saying that the Ai Group does not recognise the right of unions to be part of the industry and to be a very vibrant part of taking the industry forward.

We are not opposed to that at all, either ideological or practically.
Senator CASH—Can I take you to productivity improvements within the building and construction industry since the inception of the ABCC.

Do you have evidence that there have been productivity improvements in the sector?

Mrs Ridout—If you look at working days lost in the sector, they have dropped like stones.

A lot of the productivity data is pretty variable and—not ambiguous but messy.
But look at all the measures that the industry would take—project completions, working days lost, work done to budget on time.

All these measures are cast-iron indicators of a more productive industry.

Whilst we cannot necessarily claim productivity in the industry in the last two years has risen by X and say it is all attributed to that, all the major indicators of industry performance lead you to that conclusion.

Senator FISHER—Just a tad of a trend.


Mrs Ridout—Productivity in the Australian economy generally is something that we should all be concerned about.

It is not strong and it has not been strong for a number of years.

There are a whole lot of reasons for that.

But when you had an industry which was losing so many working days and having to price in so much construction and industrial risk into contracts, with a lot of overruns on contracts, that was not good.
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 26 Senate Monday, 31 August 2009 What we are seeing from the grassroots up is reports of a more productive industry, and the outcomes speak for themselves.

Senator CASH—Is that put down to having a strong, robust cop on the beat?

Mrs Ridout—We would say yes, definitely yes—from both sides.

You have to remember that both sides of the industry were not mad keen on a number of these reforms.
The industry knew it had a problem but did not quite know how to solve it.

The royal commission came in and shone a big, very bright light on the problems and both sides had to accept the rule of an independent umpire and had to work by new rules, and they have.

From the employers’ side, it has been a very positive move forward, and we do not want to go backwards to the bad old days.
Senator FISHER—In terms of interrogation powers and the switch-on, switch-off proposition, why would it be that if you are a good workplace you can get the powers switched off and if you are a bad workplace you can get the powers switched on?

How does that make any sense and why would a good workplace want those powers switched off if they were really good?

Mr Barrett—I think you go to the nub of the problem with this provision.
The minister in the second reading speech made reference to ‘on a good project’ the powers may not be needed and you might want to switch it off.

Our fundamental proposition is: how do you know it is going to be a good project?

If it is going to be a good project then the provision is benign and it is not needed, and life goes on.

If you have a project that does have significant problems and that power is needed then why would you have switched it off?
Senator FISHER—The three of you are very experienced in this industry, particularly you, Mr Barrett, so why do you think it is being seriously proposed by the government?

Mr Barrett—The logic, I must say, escapes everyone I have spoken to.

It was not a Wilcox recommendation.

Of the federal government agencies that have this type of power—and you may know better than me—I do not know of any that have this switch-on, switch-off power.
I could not imagine the ACCC having that sort of switch-off power with the interrogation powers.

There is a bizarre provision in the bill— Senator FISHER—Do you think it is going to be as easy as switching off the power at that outlet over there?

Mr Barrett—There are some unusual things.

There is a provision that allows the powers to be switched off when the project is completed.

I dare say there is a reason that it was drafted that way, but the logic of that escapes us.
Why would you want to switch off the power when a project is finished, except if the regulator wanted to investigate something that occurred on that matter?

In that case, if they did, why would you want the power turned off?

It is a provision that does surprise people and that is difficult to understand.

Mrs Ridout—In a sense, there is a lot of pressure put on the government around this area.
Industrial relations is an area of some pragmatism and compromise but, unfortunately, this compromise was not a really good one and I suspect not totally thought through.

Senator FISHER—Why do you think the bill proposes to effectively castrate the cop in five years time rather than doing as you recommend, which is review the powers at that time?

Mr Barrett—That was a recommendation of— Senator Jacinta Collins interjecting— Senator FISHER—I am listening, Mr Barrett.

Please proceed.

Hansard is recording.


CHAIR—Some of us get a bit pained when you talk about castration.

We will leave that to one side.

Senator FISHER—The industry may well be pained too— Senator ABETZ—It is a wonder that those who have expressed concern in that case.

Senator FISHER—but there will still be a body there but a vital part of the function will be discontinued.

Mr Barrett—This is a discussion I should stay away from!

Justice Wilcox made the recommendation about turning off.
In all our submissions and our meetings with Justice Wilcox, our position was exactly the same, that it probably is appropriate to have a review.

Our position would be the same as the ACTU, that eventually you would like to know that all Australian workers had the same legislative provisions and that a review is appropriate.

Our issue is that if you put in the legislation that it is automatic then it is gone.
The senators will understand how difficult it is to get things put back in legislation or passed in legislation when something is removed.
However, if the provision was there to have a formal review, whether it was actually in the hands of EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 27 a committee like this Senate committee, at least then you have bookmarked a formal assessment by an independent organisation as to whether that review is required, and then you can move on.
Our issue is not about the review; it is about removing the power and then saying, ‘Let’s have a review afterwards.’ That is our issue.

Senator FISHER—There is no need for a review; there is already a destination.

That is castration, in my language.

Mrs Ridout—I think it can be treated emotionally like that, but we do go back to our fundamental position: that we believe all workers, in an ideal world, should be treated the same.

We have no problem with that.


Senator FISHER—But you have outlined the reasons why, in this industry— Mrs Ridout—But there are special issues in the construction industry.

We know how hard won the progress we have made has been and how hard it has been to achieve.

It is still not settled; it is not a complete process.

The culture is still not coherent and consistent across the industry.

It might be in five years time; it might not be.


But we do not want to risk all of that and to have all the pain that has been gone through, as we are going through it at the moment, thrown away.

So we just feel we should be cautious.

It is a bit like withdrawing the fiscal stimulus; we should be very cautious about that too.

That is for another day.

Senator FISHER—Mr Smith, this may be one for you; you have been splendidly silent.

Mrs Ridout—We are a very cautious organisation.


Senator FISHER—In terms of your observations and recommendations about the pursuit of underpayment claims in the sector and how that will be expected to be handled by the building inspectorate within Fair Work Australia, you make observations about how, firstly, they have not got the skills.

Well, they will have to invest in getting the skills.

Secondly, it is an activity carried out more appropriately elsewhere in Fair Work Australia.
What do you think the building inspectorate will have time left to do once it has upskilled in underpayment claims and then is pursuing those?

Mr Smith—That is our concern—that, unless there is a very significant increase in the budget of the Building Industry Inspectorate versus the ABCC— Senator FISHER—And at this stage that has not been projected, has it?

Mr Smith—There is no evidence of that.


Unless there is such an increase, a lot of the resources that we see as being appropriately directed to the sorts of matters that are currently being dealt with by the ABCC would need to be diverted.

As has been brought up in our submission and also by various senators, there is this understanding formally that has been reached between the ABCC and the Workplace Ombudsman, and we assume that that has now transferred across to the Fair Work Ombudsman.
Certainly that is the case on the ground.

There is no evidence at all that the Fair Work Ombudsman is not set up and happy to be carrying out these tasks.

There is a team of people working on these important underpayment issues at the Fair Work Ombudsman, so this is an issue that we do not see as a problem.

So why change the existing structures that we see as working very effectively?

Senator FISHER—Thank you.

I have one further question.


You make observations in your submission about the degree of oversighting of the director of the Building Industry Inspectorate.

Others have suggested that that is binding the new director up in red tape.

You then go on to comment about how, if the Fair Work Building Industry Inspectorate proves to be ineffective, the risks associated with industrial lawlessness will again need to be factored into your pricing, Mr Barrett, and the pricing of construction contracts.
So are you, in a sense, saying not only that the risks associated with industrial lawlessness will have to be factored in if the new cop proves ineffective but that, right from day 1, the red tape costs of the new cop will have to be factored in—because red tape comes at a cost, obviously?

Mrs Ridout—I think Stephen and Jim may make comments on that.

In a sense we are not uncomfortable that the director is oversighted and that it is a rigorous oversighting because they are very significant powers.
I am not comfortable with the ATO, the ASIC or the ACCC having these kinds of powers and not being responsible and accountable and oversighted.

So there is not a problem with that.

But often this function does need to operate with expedition and we are very concerned that we do not tie them up so that they cannot operate expeditiously.

Mr Smith—Senator, as you will see in our submission, we have set out in some detail all of the different elements of this oversighting and the safeguards that are there.
It is all very extensive.

We finish with the statement that if this does not prove to be workable then parliament should be open to some amendments.

But EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 28 Senate Monday, 31 August 2009 if you take away the independent assessor—which, as we have pointed out, we do not think is logical—and leave the other rigour that is there, we are hopeful that that will be workable and appropriate.
If it proves not to be, then we would be seeking amendments to the legislation, but we are hopeful.

Senator FISHER—Do you support the abolition of the ABCC?

Mrs Ridout—No.

Senator ABETZ—Are you aware of the decision by His Honour Justice Jessup in VID 89 of 2009, a Federal Court decision involving John Holland and a number of unions?

Are any of you three at the table aware of that decision?

It involved the Westgate Bridge.

Mrs Ridout—Yes.

Senator ABETZ—So that rings a bell.


Do the findings and the information delivered by way of affidavit material in that case suggest that the workplace culture is still in need of some reform and change?

Mrs Ridout—I think it does indicate that the problems are latent and they can easily come to the fore.

Senator ABETZ—And blatant.

Mrs Ridout—Yes, they are there.


What we are really saying is that is why this process is incomplete and we need a number of more years for a positive culture to become more entrenched.

It is not in every workplace.

Senator ABETZ—Of course not.

Mrs Ridout—But it is there and we want people to go to work in a harmonious and positive workplace, and we want employers to be able to invest in those sorts of projects.
CHAIR—I want to follow up some of the discussion and what you said in your introductory remarks.

I am interested to explore with you why you believe that employers who underpay, who breach agreements or who breach awards should have investigations conducted by the Workplace Ombudsman and now by the ombudsman group within Fair Work Australia, which has different penalties, different laws and different investigatory regimes, but that breaches by employees and unions should have a far more significant regime.
Isn’t the reality of industrial relations—and we have all been around a while—that there are reactions to actions?

Why shouldn’t a reaction to an illegal action be treated the same way under the same set of laws if we have got a set of laws for the building industry as a whole?

Mr Smith—We are not putting a view that the underpayment matters are less important than the others but, as we see it, the skill sets are totally different.
The Fair Work Ombudsman employs a large team of inspectors with a skill set that is very much aligned with those underpayment claims.

On page 4 of our submission we have highlighted the statistics.

It is evident that every year there are thousands of underpayment claims that are dealt with by the Fair Work Ombudsman relating to the construction industry.

There is no evidence at all that those matters are not being vigorously pursued and appropriately dealt with.
The ABCC has a team of investigators with a totally different skill set.

We would challenge the view that the ABCC inspectors are focused on employees and unions.

For example, there has been a number of prosecutions of employers who paid strike pay.

So there are matters that are pursued by the ABCC relating to employers and unions and also employees in some circumstances.
As for the skill set of the people that the ABCC employ, a lot of these people come from police backgrounds and from legal backgrounds.

There is a different skill set, and we believe that the existing arrangements are working extremely effectively and are fair to all parties.

CHAIR—It is not just underpayments, although underpayments are part of it.

But it is unlawful if an employer is making an underpayment, isn’t it?

Mr Smith—It is unlawful.


CHAIR—But you are suggesting that unlawful behaviour should be treated differently, that different penalties be applied to a different category of unlawful behaviour.

Is that what you are putting to us?

Mr Smith—No.

It is just that a team of inspectors with a different skill set should work on those claims.

The existing arrangements are working.


The penalties that are currently there in the ABCC Act are relating to building industry matters, so matters that fall within the BCII Act have the maximum $110,000 penalties and matters that fall within the Fair Work legislation at the moment have the maximum $33,000 penalties.
We are not seeing this as an issue about the penalties; we are seeing this as an issue about who has the most appropriate skill set and about if the existing arrangements are working effectively.

All the evidence is that EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 29 they are and that Nick Wilson is happy with the existing arrangements, so we assume that he and his body are, and that John Lloyd is happy with the existing arrangements.
CHAIR—How much of the behaviour in the industry that is complained about is a consequence of employer breaches of instruments or underpayments or breaches of other legal obligations such as superannuation payments or in respect of sham contracting arrangements, for instance?

Mr Barrett—How would you know?

But the issue is that the law makes provision for dealing with those issues.

So if the fact is that an employer has acted unlawfully— CHAIR—I take it from your answer that you do not know.
Mr Barrett—I don’t think anyone knows.

Mrs Ridout—I don’t think anyone knows the answer.

CHAIR—That is all right.

I just wanted to be clear.

Mrs Ridout—But you must realise that we are not saying that employers are blemishless on this issue.

We think it is absolutely appropriate that there be processes in place to administer penalties and investigate breaches as to underpayments or no SG contributions et cetera.

We are not wanting a one-sided approach to this.

Senator BILYK—I want to clarify this.


If people are investigated by the Fair Work Ombudsman, are their fines or whatever they are then not covered by the Fair Work legislation whereas if people are investigated under the BCII Act then they would be subject to the penalties under that act?

Therefore there are two different approaches?

I need clarification that under your proposals there is a separateness of fairness.

Mr Smith—There are two pieces of legislation and there is some overlap.
If an employer or an employee or a union commits a breach of the Fair Work legislation, certain offences apply and if there is a breach of the BCII Act certain offences apply.

It does not naturally follow, we believe, that the Fair Work inspectors would not have any jurisdiction to deal with building industry matters.

It is a technical point which we would be happy to have a look at.
Senator BILYK—So you would be happy that the penalties were applied, no matter who investigated, under the one act to people right across the spectrum in the building industry—employers, employees and unions?

Mr Smith—Yes.

Mr Barrett—I think our issue was about resources and skills.

I think it said in the explanatory memorandum that these measures would be budget neutral.
Our issue was that if the ABCC—or the new body—is going to inherit, without an increase in resources, these functions that were previously undertaken by the Ombudsman then its ability to do the full range of work would be curtailed.

If some of those resources that were previously used to investigate the— Senator JACINTA COLLINS—Building issues.

Mr Barrett—Yes.

The issue for us is resources and the skill set of the people, not whether things should be investigated.
Senator BILYK—The resources problem could be averted if people changed the way they worked with regard to the BCII.

It is not necessarily the case that they would need more money.

They actually get eight or nine times more funding per worker in the industry than through the other process.

Mr Smith—There is one other issue, and that is that the Fair Work Ombudsman is set up to deal with those matters.
The systems are in place and there is a fairly standardised process, which is set out quite publicly, by which the Fair Work Ombudsman deals with prosecutions.

So to move it all over would not necessarily be a seamless exercise.

Senator BILYK—I understand the issue in relation to skill sets.

I just wanted to be very clear that you are not saying that an employer can be penalised at a lesser rate than a union or and employee.

Mrs Ridout—No, we are not saying that at all.


We still actively support the rigorous investigation of underpayment of salaries and superannuation entitlements and all that.

We are just saying it is in the best place at the moment, so why we would shift it to a place that is a second-best solution as well as undermine what they had got to do there.

Ai Group is not an organisation that signs off on underpayment of wages and entitlements.

That is not the game.


EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 30 Senate Monday, 31 August 2009 Senator JACINTA COLLINS—Mr Smith, can I go back to an earlier point you made with regard to Mr Lloyd’s submission.

I assume you are talking about the letter to the Deputy Prime Minister that you attached to your submission.

Mr Smith—Yes.

Senator JACINTA COLLINS—We have not directly received a submission, so I would like to properly understand this process.
This was a letter that Mr Lloyd wrote to the Deputy Prime Minister, who then provided it to COIL.

Mr Smith—It was tabled in parliament but it was also released to the media.

I think in our submission we identified a particular media source that we obtained the letter from, but I understand that it was actually tendered in parliament.

Senator JACINTA COLLINS—Okay.

So it was other information from COIL that you referred to in terms of the discussion about amendments?

Mr Smith—It was.
Mr Smith—It was.

As the committee may be aware, the COIL process is a confidential forum—and we have always very much respected that.

But, in the case of the four statements that we have made in our submission, the government did authorise and encourage the release of that information and the use of it in our submission.

It is consistent with the letter that the Deputy Prime Minister sent to the chair of the committee.
Senator JACINTA COLLINS—We have two copies of this letter, so I am just wondering if there is an attachment C or if that is just a duplication in our papers.

Mr Smith—I think it is just a duplication in your papers, because it is not in ours.

Senator JACINTA COLLINS—I just wanted to make sure that there is not something else that we did not get.

Mr Barrett, excuse my ignorance but could you explain the relationship between ACA and AiG.
Mr Barrett—The Australian Constructors Association Ltd is a separate company that was formed in 1994 to represent the interests of major contractors.

Shortly after it was formed, the Australian Industry Group won the right to provide management services.

We have a commercial arrangement with the ACA.

The ACA has its own board, it has its own accounts and it makes its own decisions, but we provide management services in a commercial arrangement with them.
However, on issues to do with industrial relations policy, we often have the same views and, on this occasion, we elected to make a joint submission on these issues.

Mrs Ridout—Can I add that most of the members of the ACA are also members of the Australian Industry Group.

We have been actively representing construction for over 30 years.

In all those years we have had a very strong interest in the industry.

There is a big overlap in membership, but it is separate and it is a very good arrangement.
CHAIR—Thank you for your submission and for your presentation to the committee today.

Mrs Ridout—Thank you very much.

It has been a most interesting discussion.

Again, thank you to Mr Carter for all his gracious support for our organisation.

Proceedings suspended from 12.10 pm to 1.15 pm EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 31 QUINN, Mr Gregory Denis, Managing Director, Hutchinson Builders CHAIR—Welcome.
Do you have any comments to make on the capacity in which you appear?

Mr Quinn—Hutchinson Builders are a medium sized construction contractor based in Brisbane.

CHAIR—We have received your submission.

Are there any alterations or additions you would like to make to that?

Mr Quinn—Perhaps a few embellishments, if that is okay.

CHAIR—Sure.

I invite you to make some opening remarks to the committee which will be followed by questions.

Mr Quinn—Firstly, I am not an industrial relations professional.
I am the managing director of a construction company that last year turned over just over $800 million.

We are a little different to a lot of contractors, however, in that we employ a lot of people.

Currently we have 850-odd direct employees, 170 of which are apprentices.

We are big trainers as well.


Again, a point of differentiation between us and a lot of other larger contractors is that we will do anything from a $3,000 set of stairs on the back of your house to a $200 million or $300 million building in any of the capital cities around Australia.

About 70 per cent of our book is focused on the private sector—that is down from about 90 per cent a year ago.

The balance of 30 per cent is in the public sector.

We operate across most sectors of the marketplace.


We have a fleet of cranes and hoists—25 cranes and 15 hoists—that service our operations in the big end of town and we run independent subcontractor operations that cover walls, ceilings and scaffolding, and, very recently, plumbing and electrical businesses to service our own operations.

Our industrial instrument is a collective agreement, 2009-11, that we have just had certified.

It is national code compliant.


We have also recently achieved our Federal Safety Commissioner accreditation.

Our approach to industrial relations is a little different.

Whilst we operate on the eastern seaboard, our largest base is Brisbane and Queensland.
I would have to say, and I must admit it is anecdotal, that there would not be too many builders and subcontractors in the marketplace at the moment who do not think that the industrial scene is better than it might have been three, four or five years ago, and who are wishing for more of the same.
At Hutchinson’s, I can genuinely say that through the three enterprise bargaining agreements that I have presided over going back to 2002, we have not seen any change whatsoever in the way we do business or in our relationships with the union movement, despite significantly changed legislation over time with the introduction of Work Choices, the improvement act and the establishment of the ABCC.

Our general mode of operation has not altered at all.
Unions have never run our business and never ever will run our business, but we have a very open communication with the union movement and everybody else in the marketplace for that matter.

We classify union representatives in the same category as clients, subcontractors, consultants and workers.

We work on relationships.

We have a relationship model that has been entrenched for at least the last decade or so.
As much as that relationship model needs to work within the confines of the law, we took a conscious decision in 2006 not to change the way we do business with our people just simply because we could—because we had the legislative change at the top that allowed us to be a little harder in some cases and a little softer in others; we decided that we run our business not governments.
So we have adopted a very passive, more-of-the-same type of approach throughout those various regimes, which is a little different.

In other words, we did not take advantage of the legislative support as we could have.

Additionally, we hold a bit of a different view on unions in that they have been around since time began.

They have been around for more than 100 years and we cannot see that they are going to disappear off the face of the earth.
Regardless of the government of the day, they have a role to play.

We decided a long time ago that since they have a role to play let’s respect that role and work with them.

We have never had any problems in the past, apart from day-to-day operational issues, and we do not anticipate that we will have any problems in the future.
We simply try to accommodate the reality that unions exist—they have a role to play representing their membership and we treat them with the respect they deserve along with all the other stakeholders in the marketplace.

Whilst our approach is to work closely with the unions regardless of the government of the day, we certainly have to work within the confines of the law.
We do have a standing position with the unions, and that is no wildcatting and nothing that is illogical, unfair or not sensible, and we want solid productivity as a result.

We have always been able to get that balance.


Sure, we have had our difficulties from time to time, but we EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 32 Senate Monday, 31 August 2009 have always been able to maintain a balance that, at least in my view, warrants the position that we adopt on industrial relations and people management.
I accept that there are a couple of flaws in this model, and I perhaps might not hold the same view if we operated in a couple of other parts of the country that we do not currently operate in.

We predominately operate in Queensland and we have good relationships with all of the players at a union level—with the BLF and CFMEU in Queensland as well as with the master builders, the employer reps, subbies and everybody else in the marketplace, for that matter.
But, again, I do acknowledge that, if we had the exposure that some other contractors have in some parts of Australia, I might hold a different view, from what I hear.

Specifically, I would like to briefly cover a couple of issues I was asked to cover—firstly, workplace culture.

Probably the ABCC does have unfinished business.

It is a pretty big ask, in my view, for the ABCC in a three- or four-year period to change the culture of an industry.

It is almost like asking it to do it overnight.


Having said that, I will almost guarantee that it will come down to a handful of recalcitrants from both sides of the fence out in the marketplace.

There will be a handful of unionists that are irrational and militant around Australia somewhere.

There will be a smattering of workers throughout Australia that love the adversity that comes with unionism and like the sense of power that perhaps they get from having a stoush now and then.
On the employers’ side of the fence, there are a bunch of employers also that like to use the law to full effect regardless of real workplace relations in the field.

I hold to the view that it is a minority out there.

I am not certain how big that minority is, but I reckon if we homed in on the problem unionists, the problem workers and the problem employers we might have a better chance of coming up with a cooperative model.
I believe the approach that I just outlined is how the industry was 20 years ago.

In the relationships between builders and clients and builders and subcontractors, whoever was the most powerful won the day through intimidation.

That has changed over the last 20 years.

Everything we see now—the way of doing business moving forward—is about relationships and alliances with clients and subcontractors.
The whole business operation in the construction industry has changed in that period, and personally I think it is about time industrial relations headed down that path as well.

A new breed of people has come through in the last 15 or 20 years and there is a changing mood out there at every level.
Specifically on productivity, I tend to agree with what I read just over the weekend from the Deputy Prime Minister—a call to improve productivity moving into the future and also for stronger relationships to be developed between employers and unions.

This is Hutchinson’s pitch—it is what we do—although I do accept that we are slightly different.

It has been successful for us, so we do not really want to change what has been successful.
I would be really interested in seeing the leadership from employers, whether it is employer organisations or employers themselves, as well as the union movement, focusing much more on the productivity issue, which could have so much benefit for all concerned.

Whilst poor practices do hold back productivity, I am not sure that we have too many really bad practices in our industry that cannot be managed.
Hutchinson executed an enterprise agreement only a few months ago, and I have gone through it a million times and cannot find anything in there that is antiproductivity.

It is all up to management.

In fact, we ourselves take all of the responsibility to manage our people to gain that productivity moving on into the future.
My view is that workers respond well to good, strong management, and that is where we are targeting our energies at the moment—to try and change the way a lot of our building projects are managed to ensure that our management are actually working with the workforce to get the better gains.

It is not a theoretical exercise; it is an in-the-field, on-the-ground exercise.

To be honest, it all revolves around communication and building everybody into the process.
We operate pretty much like a small builder, despite our size, and it allows us to do this.

We have 87 projects on at the moment, ranging in size from, as I say, a $3,000 shopfront to our largest job at the moment, which is a $140 million office building in Brisbane city.

But we adopt the same approach regardless of the job that we are on.

We have the same open communication with the workforce and the subbies.

I am pretty sure the impact of the ABCC over the last few years has been positive.
I know there are alternative views in the marketplace depending on which side of the fence you sit on.

But, if the ABCC has addressed the five or 10 per cent of recalcitrants out there on both sides of the fence, I suspect it is pretty much doing its job.

I do not get too carried away with the ideological debate.

Employers and unions will run their own party line, and I guess that is what you see here today as well.

You have to decipher your way through all of that.


But the way I see it is that if I, as the managing director of Hutchinson, had to rely on the ABCC to sort my industrial relations problems out then I probably would not deserve the position I am in.

It is just another EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 33 part of doing, and we do not outsource anything within our business.
It is up to us to set up practices that can deal with our day-to-day operations.

Does the industry need a special cop?

On our sites, I do not think so, but I think that it probably does generally.

I think it is about time, though, that both unions and employers stepped up to the plate, displayed some real leadership and tried to come up with a cooperative model for the future.
The ABCC, I think, has been doing its job pretty well in the past, and it has tied up some pretty ordinary things if what I read is correct.

But, on balance, the feedback I get from my colleagues in the industry is that it is warranted for the future.

Again, we do not see unacceptable and unlawful conduct on our sites.

I really do stress that I am talking from Hutchinson’s perspective, despite what I have heard, seen and read over the years.
What usually happens on our sites at an operational level is that a union organiser, whether from the BLF or the CFMEU in Queensland, gets onto a site and perhaps does something silly, gets themselves into a corner, raises an issue, creates expectations for workers and then has to find a way out of it.

But it is just a part of unionism.

It is what they do in the interests of representing their membership.

You have two choices: you either allow it to escalate or you deal with it.
We choose to deal with it on day 1 by sunset.

Most things can be sorted out pretty simply face to face through communication, and we do not have stoppages or industrial action on our jobs.

But, having said that, I say that union organisers have a direct line to me.

If they cannot get it sorted for whatever reason, I will be on the site, providing I am available, to get something sorted out.
That might happen once every two or three months, because our people do not like to see me on their sites, so they deal with it themselves.

On the issue of right of entry, with the policing of the right of entry provisions, I think since late 2005, the experiences of Hutchinson Builders have been a bit mixed.
Because of the relationship approach that we promote, to be honest I closed my eyes to the right of entry requirements initially—until the ABCC had a few words with me and explained that it is the law of the land and we were subject to the national code of conduct.

And so we changed our ways pretty early in the piece, despite me recommending to our 87 site managers, ‘Fellas, it’s okay.

Just do what you have been doing in the past.


I don’t see why we should change the way we do business by closing out an organiser who was allowed on our sites last week because the legislation says they now need a right of entry form with 24 or 48 hours notice.’ Again the ABCC talked to me about it and we adopted the legal requirement—that is, requiring right of entry notifications.
It has been accepted by the BLF and CFMEU organisers on our jobs as just part of the law of the land and there is compliance there.

Save for that, our approach on site is pretty similar to the way it has been since at least 2002.

On the issue of penalties, I do not even know what the penalties are for breaches.

I know they are large.

I do not personally have any problems with penalties.

If there is no intention to break the law then you should not have any worries about paying the fine.
That is without even knowing what they are—although I did at the time when I was asked to come and talk to representatives of the ABCC about not applying stringent right of entry provisions, at least initially.

In early 2006 I checked out what the exposure was.

Typically I hold a personal view that if the right intentions are there and there is no intent to break the law then people should not have a worry about paying the fines.
What do I think about powers being turned off and unions regaining control of sites?

That is a question that has been put to me infrequently over the last few months.

All I can say is that unions have never had control of our sites, ever; and never will.

The fact that I am not worried about it in my view actually reflects the relationship model that we adopt within our business.
The fact is that I cannot differentiate between the three different areas—between 2002 and 2005, 2006 and 2008, and 2009 ongoing—with different industrial instruments in place because the laws of the land have changed.

We cannot differentiate how we deal with things on site.

I can understand the position being adopted by employers and employees.

From what I read I understand the positions that are being adopted along party lines.
I think personally there should be something in whatever legislation moves forward that drives parties to communicate, consult and develop relationships.

That may not be possible—I am not sure, not being a legislator—but I think that is the area that employers and employees should look to for the future.

If the legislation needs to stay tough, without defining what tough means, to deal with those recalcitrant minorities out there on both sides of the fence then so be it.

Maybe that needs to occur.


But there also needs to be some sort of a transition, at least in my view, for the future.

Otherwise the next time there is a change in government there will be a change in workplace legislation.

No doubt that will revert to EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 34 Senate Monday, 31 August 2009 perhaps something more aligned with employer’s thinking.
So my view is to go straight down the middle of the road and work with both sides of the industry—unions and employers.

Senator ABETZ—Thank you very much for the submission.

I would like to ask a few preliminary questions.

First of all, on the EBA that you referred to, are we in a position to potentially get a copy of that or not?

Mr Quinn—I think it is a public document.

I am happy to give you a copy of it.

Senator ABETZ—Thank you.

You indicated that you were asked to cover certain areas.
I was just wondering who asked you to cover those areas?

Mr Quinn—When I was contacted by the secretariat, advising that a number of industry representatives were being invited to present as opposed to union organisations and employer organisations, to be honest I did not even know what the inquiry was about and I asked for some details to be sent through.

The details that were shot through were that it was general—how do you operate your business?
Senator ABETZ—So it was from the secretariat of the committee.

Mr Quinn—Yes, it was from the secretariat.

Senator ABETZ—And they approached you to make a submission?

Mr Quinn—Yes.

Senator ABETZ—You indicated in your submission—and correct me if I misunderstood this—that you have an agreement with unions as to no wild catting.

Is that correct?

Mr Quinn—It is not in any written form but the orders of the day are no wild catting.

Senator ABETZ—And that is just a gentleman’s agreement?
Mr Quinn—That is a good enough description, yes.

Senator ABETZ—You say that you need to have a good culture et cetera, and I think everybody would agree with that—if we had a good culture, we would not need any traffic laws either because everybody would behave perfectly reasonably on the roads; but unfortunately a few people do not so we need laws to regulate behaviour on our roads.
You indicated that possibly the ABCC might have a role to play in relation to, as I think you described them, a handful of recalcitrants.

Are you aware of a fellow by the name of Kevin Reynolds?

Mr Quinn—Yes, I have heard of Kevin Reynolds.

Senator ABETZ—Would you describe him as a potential recalcitrant?

Mr Quinn—He could well be.

Not operating in Western Australia I am not really certain, but from what I read he possibly fits into that category.
Senator ABETZ—Yes, so that is the type of person that you may have had in mind when you were talking about recalcitrants.

Mr Quinn—Perhaps.

Senator ABETZ—So it was not just some sort of term you plucked out of thin air without reference to particular operators within the building union area.

Mr Quinn—I think that is fair, but if you asked me to nominate another then I possibly could not.

So it is really only the notoriety of Kevin Reynolds from the west that sort of makes his name easy to recall.
Senator ABETZ—Fair enough.

Senator FISHER—What about Joe McDonald.

Senator ABETZ—I have been reminded of the name Joe McDonald.

Does that ring a bell for you?

Mr Quinn—Yes, it rings a bell.

Senator ABETZ—Following the building industrial relations matters as you do, you would undoubtedly be aware of the Federal Court decision in March of this year dealing with the West Gate Bridge situation.

Mr Quinn—I actually do not follow industrial relations closely at all.
We really only look inwardly at our own business.

But that does ring a bell.

Senator ABETZ—So you would agree that there are certain situations where it may be appropriate to have an ABCC type body operating?

EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 35 Mr Quinn—Yes, I acknowledge that.
Senator ABETZ—And I suppose you would accept as well that 90 per cent of people driving on the roads are law-abiding citizens but we still need a traffic police force, don’t we?

Mr Quinn—Sure.

Senator ABETZ—And just because 90 per cent of people in the building and construction sector play the game appropriately et cetera does not necessarily mean that there is no role for an ABCC?

Mr Quinn—I would agree with that.

Senator ABETZ—I will seek some guidance on this next point.
I am aware that you have put in a submission to us.

We were told that there was some confidentiality attached to that.

Is that something which you would wish to retain?

Mr Quinn—No, I think you can have a copy of it.

It is fairly— Senator ABETZ—We already have a copy of it.

I am wondering whether, potentially in questioning et cetera, reference can be made to it.

I just did not want to offend— Mr Quinn—I am happy for you to make reference to it.

I do not see any problems with that.


CHAIR—Just to clarify this issue.

Mr Quinn, when the submission was sent through to us it was marked as a confidential submission.

I guess the question is: are you happy for that submission to be made public now?
Mr Quinn—My basic thinking on that front was that, when you look at the organisations that have come before me this morning and will follow me this afternoon, they are organisations that have staff resources to put together submissions that represent the interests of their respective constituents.

Mine is a one-and-a-half pager that I did not think really warranted putting up on the website.

I really do not mind.


I do not see that it adds any value— CHAIR—There is nothing in there that you needed to keep in confidence?

Mr Quinn—No, not at all.

CHAIR—On that basis, we will treat it as a public submission.

Mr Quinn—Sure.

Senator ABETZ—Thanks for that clarification, Mr Quinn and Chair.

I just wanted to make sure that there were not any matters that may have occasioned embarrassment.

Are Hutchinsons members of the MBA or HIA?


Mr Quinn—We are members of the master builders in Queensland and in New South Wales.

Senator ABETZ—Are you aware of the split in relation to the workforce—how many are in unions and, of those that are in unions, which they would be members of?

Mr Quinn—I would take a punt.

Of 230-odd labourers, I would think perhaps 170 would be in the union.
Of 170-odd carpenters, I would think there might be 70 or 80 in the union, and that reflects the small end of town/big end of town business practices that we have.

Of our 170 apprentices, none of them would be in the union.

Senator ABETZ—In relation to those that are in a union, who are your dealings with mainly?

Mr Quinn—The CFMEU and BLF.

Senator ABETZ—They are the two that you would mainly deal with?

Mr Quinn—Yes.
Mr Quinn—Yes.

Senator ABETZ—I commend you for saying that the way that you run the show is akin to a small family business, albeit that the number of employees you have—namely 850—would suggest that you would not exactly fall into the small business category, even with Labor’s definition.

We have argued about whether it should be 15 or 100 or something in between.

They are the limits that exist at this table, but 850 is, by my estimation at least, quite a big business.
But I commend you on the fact that you have that small business culture.

If I recall correctly, you indicated that there was a culture of intimidation within the building and construction sector some 20 years ago.

Is that right?

Mr Quinn—My reference was not to industrial relations on that point; it was to dealings with clients both private and public and dealings with subcontractors.

It was quite an adversarial type of model that has been unwound over that 20-year period, I believe.
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 36 Senate Monday, 31 August 2009 Senator ABETZ—Twenty years ago were you holding a position with the MBA?

Mr Quinn—Yes, I was.

Senator ABETZ—You were one of those participants of the employer organisation at that stage?

Mr Quinn—Yes, for 17 years from 1984.

Senator ABETZ—So you are commenting on your experience from your representative role in the MBA?

Mr Quinn—Yes.
Mr Quinn—Yes.

Senator ABETZ—Whilst you say that Hutchinsons have not experienced too much outrageous union behaviour, you do indicate to us that, sometimes at least, it is a result of radical actions by individual organisers.

Would you care to provide us with an example of what you are talking about there?
Mr Quinn—It could well be that an organiser who has given notice to attend a site at a certain time arrives at the site and identifies something that is perhaps attached to housekeeping, such as site safety, and then calls the management team together that normally accompanies the union organiser on that site tour to deal with it.

To be honest, the times that I find things escalate are when there is a personality issue between the Hutchinson site manager and the union organiser.
That is a two-way street, I must admit.

Typically in those situations I get the phone call and I either attend myself immediately or nominate somebody else to go and try to conciliate the thing quickly, which is normally the result.

Senator ABETZ—Without putting too fine a point on it, do you think you would be able to get those sorts of sensible outcomes—they are from what I can gather you are saying—if you were dealing with a Joe McDonald or a Kevin Reynolds in Queensland?
Mr Quinn—I am not really sure.

Senator ABETZ—It is a pity the Hansard cannot pick up the witness smiling broadly at the question.

CHAIR—I do not think that is fair, Senator Abetz.

If you want to actually ask the witness to indicate in more detail their response to that I think that would be better.

Senator ABETZ—I will be.

Mr Quinn, do you think you would be able to effect the same sorts of outcomes if you were dealing with the likes of Joe McDonald or Kevin Reynolds?

Mr Quinn—I am not really sure.


I really have not had exposure to Kevin Reynolds or Joe McDonald and perhaps I have not come across people at a Queensland or New South Wales level that allegedly have their approach to unionism.

But I have come across a lot of union representatives in the last 20 years, both in Queensland and in New South Wales, and I think that in most cases I have been able to reach a resolution.
Senator ABETZ—But you did indicate earlier in your opening comments that you were providing the perspective of somebody dealing in Queensland and New South Wales.

Can you tell us why you just happened to pick on the states of Victoria and Western Australia as potentially experiencing a different culture than that in New South Wales and Queensland?

Mr Quinn—I am not certain I did.


I thought you nominated Victoria and Western Australia and I responded, ‘I’m not sure,’ although, having said that, they are renowned, for sure, as states that have a fairly strong approach to industrial relations.

Senator ABETZ—I may have verballed you on that and if that is the case I withdraw that, but the Hansard will disclose what either or both of us said.
But you do agree with me that those two states, irrespective of what we may have said previously, are renowned for those activities.

So do you believe that there is a role for the ABCC especially in the states of Victoria and Western Australia?

Mr Quinn—Based on what I hear, yes.

Senator SIEWERT—Maybe I will continue from where Senator Abetz left off.

So you hear from your contacts or from the media?

Mr Quinn—From the media.


Senator SIEWERT—Could you outline a little bit what your interaction with the ABCC has been and the extent of it?

You referred in your opening comments to your contact with them over the right of entry provisions.

I am wondering how extensive your contact with the ABCC has been.

Mr Quinn—Going back approximately two years or maybe 2½ years ago, there were I think two complaints about Hutchinson Builders’ noncompliance with right of entry provisions.
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 37 Senator SIEWERT—Am I allowed to ask who made those complaints?

Mr Quinn—I am not certain, but I had contact from the ABCC, to be honest.
I made representations face- to-face with the ABCC to talk it through and espouse the industrial relations approach that we take on our projects and that the responsibility sat with me because of the instructions I had given our people about just moving into the new regime as if there were no change.

It was quickly pointed out to me that the law is the law.

So I walked out and invoked across the board at our place the need for right of entry notices to be put in place.
That took a couple of weeks to work through with our people as well as the union movement.

It has been in place since that time.

So it was really noncompliance on my behalf, thinking that it was unwarranted.

Senator SIEWERT—Have you had any other interaction with the ABCC since then?

Mr Quinn—We have had one case on a North Brisbane site where an employee representative allegedly applied pressure to a subcontractor whom I think might have been a steel fixer from memory.
The case was not withdrawn but it did not result in any action against Hutchinsons.

Senator SIEWERT—Thank you for that.

Prior to the ABCC contacting you requiring you to conform to the law, had you had any problems with right of entry?

Mr Quinn—No, we had not.


However, I suspect it is possibly linked to a couple of relevant employee representatives on the site who perhaps were being monitored or watched, or there might have been some soft complaints come back that were never formalised, and as a consequence there was a greater focus on Hutchinsons.

Senator SIEWERT—You touched on productivity in your opening address as well.

Has your productivity improved?

Have you noticed any significant difference since the ABCC laws have changed?
Mr Quinn—No, there has not really been any change as a result of that threshold.

Our productivity approach is more about Hutchinsons looking inwardly and working closely with our respective subcontractors, site managers and workforce to try to get maximum output.

We are prepared to pay well and reward well for performance but we want maximum output as a result.
If you asked me to give you some statistics I could not, but we are happy with where it is at the moment and we are anticipating an improvement moving forward as well.

Senator SIEWERT—By the sound of what you have said you have obviously been working very closely with your employees and with unions in the past to negotiate good outcomes.

Have you found that satisfactory in the past?

Mr Quinn—I have.

Senator SIEWERT—I want to go back to the contact you have had with the ABCC.
You have never had the ABCC contact you around employee provisions such as wages and conditions to ensure that you are meeting requirements?

Mr Quinn—No, we have not.

But, having said that, we are recognised as good payers and we do not exploit employee wages and conditions in any way, so that should not be surprising.
Senator SIEWERT—In terms of the question that Senator Abetz asked you about speculating on whether you would be able to operate with the unions in my home state of Western Australia, given that you are, from what I have seen and heard from you, good employers and given your reputation, what would make you think that you would not be able to negotiate with unions in Western Australia?

Mr Quinn—I do not really hold that view; I just do not know.

I have never had to move down that path.


Western Australia has not really been on our radar screen for business reasons, so I really do not know what the answer to that is.

I have never contemplated it, because it has never been on the agenda.

Senator SIEWERT—The other issue I would like to touch on quickly is around occupational health and safety.

It is one of the issues that a number of people raised with the introduction of the ABCC and the BCII Bill.
Are you aware of any issues in the industry around occupational health and safety in relation to the implementation of the ABCC and the act?

Mr Quinn—I am not really across it, although health and safety has a very high focus at every level within our industry for all of the obvious reasons.

It is not a particularly safe industry, and so we are continually trying to improve things in a practical way.

Good health and safety is always an easy target because it is not hard.
I acknowledge that I could walk onto any one of our 87 sites tomorrow and find something on each of EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 38 Senate Monday, 31 August 2009 them that might not be absolutely up to speed, but we just continually try to improve the most we can within reason.

So, no, I am not aware of any linkages to amendments and health and safety.
CHAIR—In relation to the disputes that you have on the sites you are obviously the principal contractor, but below that level there would be any number of subcontractors and other contractors.

What results of disputes actually occur because of activities that they undertake, or do you take control of all the IR on the site?

My experience is that there is always reaction to another action.

One may say that the reaction to the initial action is over the top or overkill, or maybe it is not.
That is for others to judge.

I am just trying to work out where the compliance issues happen and what the level of noncompliance is.

Mr Quinn—There is always a solution.

Whether it happens today before sunset or in three weeks time, there will be a solution.

Things have to be resolved.

Typically we take the ‘let’s deal with it quickly’ type approach.
If it is an alleged health and safety problem we sit down our site team, the relevant subcontractors, representatives from the safety committee if there is one on that site and the representative of the unions and say, ‘Let’s hear and see what the issues are.’ If I am actually there, I wait to hear everything and then say, ‘Here’s what I reckon,’ and inevitably some clone of that is where we end up.
It will be our people digging in for personality reasons or the union movement digging in for personality reasons on the site, and that just needs a circuit-breaker.

Typically things do not get outside of an hour or so.

If an issue is raised and I get the phone call we can normally get things sorted out within an hour or so, or I can nominate somebody who can on behalf of Hutchinson.

I do not know whether that answered your question or not.
CHAIR—To a degree, but leave health and safety issues to one side, because they are a general site responsibility which you as the principal contractor would take responsibility for.

The example I want to give is that a subcontractor says, ‘I actually employ all these individuals as subcontractors.
They’re all subcontractors in their own right site,’ and the employees claim otherwise and say, ‘I should be getting superannuation, workers compensation cover et cetera.’ That is one of the issues that may lead to a dispute on one of your sites.

Is that a real type of example?

Mr Quinn—Yes.

CHAIR—How would you manage those sorts of issues?

Primarily that is an issue between the subcontractor and the employees, isn’t it?

Mr Quinn—It is.
Mr Quinn—It is.

However, in our contract negotiations at the front end of the process we negotiate the price, the scope of the work and the capacity of the contractor to perform labourwise, and typically those sorts of things unfold.

It is more prevalent in the smaller end of town than it is in the bigger end of town.

It is only in the middle range, where we operate as well, that we are confronted with these sorts of issues.
Two or three years ago out of our Tweed office, where a subcontractor went broke, we found that there were 20 or 25 ABN contractors working for the contractor who had not been paid workers compensation, superannuation et cetera.

But in the main we do not really have that sort of problem.

We are close to the industry.

We know which contractors are ideally suited for different types of projects.
CHAIR—But, in the absence of a proactive approach, which you take on the sites that you cover, if those disputes were simply left unresolved, what is the inevitable consequence of that?

I want to take you back a minute.

You have talked to us about the culture.

Witnesses up until now have talked about pockets of problems; they have talked about changing the culture in the industry.

I worked for a period of time in the industry.


I know it is a tough industry, and I am fairly familiar with some of the sorts of issues that occur on a day-to-day basis.

I am also aware, as you have demonstrated, that those issues can be fixed, they can be resolved, they can be worked through very quickly—but, if they are left unresolved, they become worse, because it is such a fast moving, time critical type of industry.
So, in terms of the cultural aspects, I am interested in what you say about the hands-on projects, the resolving and that sort of approach; as opposed to simply having legislation to try to address a cultural issue.

I am wondering whether you want to expand a little bit more on that.

Do you actually see what is being described as a tough cop on the beat?
I acknowledge you say that there is a role for the tough cop on the beat to play, but does a tough cop on the beat in itself do anything about changing the culture in the industry?

Mr Quinn—My view of the tough cop on the beat, and the culture, is about a strong, hard unionism versus a reasonable approach, which is what we primarily see in Queensland and New South Wales.

So my views on the tough cop on the beat relate to those harsh, tough industrial relations environments.
I was not aware—if I read what you were saying correctly—that the ABCC had a role in the area that you have just outlined.

We just see that as a part of commercial business, working with our subcontractors as to whether their workforce is made up of workers who operate under this mode of operation or that mode of operation, and of course that EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 39 differs right across all segments.
We operate in the housing sector, where everything is done on a subcontract, ABN basis.

So we simply work with subcontractors that are geared for different segments of the industry.

I do not know that there is a cultural problem there.

It is the way the industry is operated.

I think there have been many who have closed their eyes to the way the industry operates—I am talking more from a taxation perspective than anything else.
From an operational level, we are not really exposed nor see a major problem in any of the segments that we work in.

CHAIR—All right.

Unfortunately, we are out of time.

Thank you for your submission and for giving your presentation to the committee today.

Mr Quinn—Thank you.
Mr Quinn—Thank you.

EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 40 Senate Monday, 31 August 2009 [2.03 pm] HARNISCH, Mr Wilhelm, Chief Executive Officer, Master Builders Australia CALVER, Mr Richard, National Director Industrial Relations and Legal Counsel, Master Builders Australia CHAIR—I welcome witnesses from Master Builders Australia.

We have received your submission.

Are there any additions or alterations you would like to make?

Mr Harnisch—No, Senator.


CHAIR—I invite you to make some opening remarks to the committee, to be followed by questions.

Mr Harnisch—Thank you for the opportunity to address this committee again.

The Australian Labor Party, in the lead-up to the 2007 election and in government, gave a commitment that there would be a strong cop on the beat in the building and construction industry.
In the lead-up to the introduction of the bill on 14 June 2009 the Deputy Prime Minister said: … when we went to the last election, we gave a very clear commitment that we would abolish the Australian building and construction commission and replace it on the 1st of February next year with a new tough cop on the beat in building and construction.

During the same interview the Deputy Prime Minister said: We gave the Australian people a promise and we’ll be honouring that promise.
Upon reading the bill, Master Builders believes that the bill does not deliver the tough cop on the beat promised by the government; it will be an enforcer in name only.

We outline why this is the case in detail in our written submission.

Today I want to emphasise a number of issues that stand out about the legislation and which underpin our view that the agency will not be able to fulfil its functions adequately in terms of being a tough cop on the beat.
First of all, there are no separate laws for the new inspectorate to administer.

The very essence of the ABCC’s success to date has been taken away.

At the heart of the reforms that were recommended by the Cole royal commission was an act of special application to the building and construction industry.
The royal commission showed that there is a special case for the building construction industry laws particular to the industry and backed by appropriate penalties as a means to restore and enforce the rule of law.

For example, section 38 of the BCII Act which is to be repealed by the bill provides that: A person must not engage in unlawful industrial action.

Industrial action is more broadly defined under the Fair Work Act, with a maximum penalty of $110,000 for breaches under the current act.
The rationale for this provision is based on the additional severe consequences of industrial action in the building and construction industry compared with other industries.

By undertaking industrial action, building workers have the potential to inflict heavy financial penalties upon builders and even cause projects to be abandoned and firms to go out of business.

This point is elaborated in section 4 of our submission to this committee.
We can but agree with the comments made by Senator Fielding, who said that under the new bill: … acts of union thuggery will cost unions a lot less making it more viable for them to be involved in unlawful industrial action … The current penalty regime is important because of the additional deterrent to unlawful industrial action that is provided.
In our submission we give very recent examples of where union thuggery talked about by Senator Fielding has hit the media with a splash: the Royal Children’s Hospital and the West Gate extension project here in Melbourne.

Master Builders has accordingly focused in its submission on the reasons to retain the current laws—arguments that were also outlined at length in the Wilcox inquiry.
Justice Wilcox made findings where he proposed that the work of the ABCC needed to continue but then, as an inherent contradiction, recommended repeal of the BCII Act-specific laws upon which the work was founded.

The following words of Justice Wilcox are important throughout these proceedings and should be up in neon lights: … the ABCC’s work is not yet done.

Although I accept there has been a big improvement in building industry behaviour during recent years, some problems remain.
It would be unfortunate if the inclusion of the ABCC into the OFWO led to a reversal of the progress that has been made.

EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 41 Even Justice Wilcox came to the conclusion that the ABCC’s work is not yet done.

His warning should not be ignored.

Safeguards that prevent action are another area that we are concerned about.

The progress of which Justice Wilcox speaks will come to a halt if the bill is passed.
The work of the inspectorate in curbing unlawful industrial action should not be stifled through the overelaborate precautions and safeguards that effectively curb its action.

In addition, a great deal of its resources will now be allocated to the task of enforcing safety net provisions.

It will not have the capacity to continue the progress that the ABCC has achieved in combating unlawful industrial action.
Much attention has been given to the ability of the agency to retain a compulsory power of interview and examination; however, the safeguards that will now be put in place are bureaucratically cumbersome and excessive.

There are also procedural difficulties that we highlight in our submission, including the watering down of confidentiality.

Let me give you one of the many technical examples of how the processes are watered down.
Under the current act the content of the examination is confidential and may not be disclosed by the witness, legal counsel or the ABCC until the investigation is completed.

Under the proposed section 51(6) of the legislation the director is unable to require a person to give an undertaking not to disclose information or answers given at the examination or to discuss matters relating to the examination with another person.
Currently the integrity of examination rests upon the preservation of confidentiality ensuring that the investigation is not prejudiced.

That integrity will disappear.

This is merely one financial element of the compulsory information gathering powers that are watered down or removed, with a host of other examples set out in our written submission.
In terms of the switching-off mechanism, the provisions that encapsulate the hopeless amount of bureaucracy and diversion of resources away from dealing with unlawful industrial action that populate the bill are those which relate to the so-called ‘switching off’ of the compulsory examination power.
The bill introduces provisions that cover the establishment and appointment of a statutory office holder, the Independent Assessor, who has the job of determining whether the compulsory examination powers should not apply to the building project.

This positional process was not recommended by the Wilcox report but is a new concept.

In our submission we have raised the issue of whether this is an impermissible delegation of power from parliament.
Master Builders questions whether it is legally appropriate and a provision that properly treats the rule of law, a concept that the entire structure of the separate building and construction industry regime is designed to reinforce.

A wasteful bureaucracy is proposed in setting up the Office of the Independent Assessor.

The bill creates a new bureaucratic structure that must incur establishment costs and then have running costs thereafter.
These are not reflected in the cost assumptions that are set out in the financial impact statement for the bill.

The statement says that the bill is budget neutral.

Assuming that the Independent Assessor will need staff in order to carry out its functions, it is difficult to see how the budget neutrality will be achieved without affecting operational capacity of the inspectorate especially its duty to constrain unlawful activity.
In terms of my conclusions, for the very reasons that I have outlined we have only touched upon our call for the bill to be rejected.

It should not be passed.

A tough cop on the beat will not be created and the legislation should be fundamentally reconsidered.

I would also like to add that much has been made of the fact by the government that industrial relations law is all about creating increased productivity.

We believe that productivity and lawful behaviour will go out the door.
I finish up by quoting Justice Wilcox again.

His point is very pertinent.

He says: ... the ABCC’s work is not yet done ...

It would be unfortunate if the inclusion of the ABCC in the OFWO led to a reversal of the progress that has been made.

Thank you.

Senator CASH—Thank you, gentlemen, for your submission here today.

There are just a few points that I would like to go over with you.
We heard from the ACTU this morning that they would like to see one law for all and in particular they were referring to the cut in the maximum level of fines that may be imposed for breaches.

Why do you say that that is not acceptable in this particular industry?

Mr Harnisch—The concept of one law for all we are not arguing against.

But that goes against everything that, unfortunately, has been documented for at least three decades for this industry.
The building industry and certainly the building unions have had an unfortunate history of violence and thuggery and that is why previous royal commissions and inquiries by state governments have all led to the conclusion that special action was required.

I just remind the Senate that it was actually a Labor government that deregistered the BLF.
It was the Cole royal commission that comprehensively documented the very reasons why a special law EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 42 Senate Monday, 31 August 2009 was required, and Justice Wilcox in the most recent inquiry earlier this year also made the point that there remain problems with the industry and that the work is not yet done.
Senator CASH—It is interesting in relation to the problems within the industry that you allude to that the ACTU this morning gave evidence that they do not accept the findings of the Cole royal commission and they do not accept the findings of Justice Wilcox in relation to any inappropriate behaviour within the industry.

What do you say to that statement?

Mr Harnisch—In addition to all that there are a whole series of court decisions.

Certainly we are satisfied that there is a special case.
Mr Calver—A royal commission is the highest form of inquiry in this land.

It is the epitome of inquiries.

CHAIR—In the Senate we are not going to cop that for a minute!

Mr Calver—With respect to the senators present, it is the highest level of inquiry.

CHAIR—That is much better.

Mr Calver—Thank you.

Senator ABETZ—Just for the record, I would say that royal commissions have a bit more rigour than inquiries conducted by my good friend Senator Marshall.

CHAIR—Oh, now, Eric.


Mr Calver—Former Justice Wilcox found that the Cole royal commission inquiry’s findings were indeed warranted.

He said they were too powerful to ignore.

So, despite the rejection by the ACTU, we have what we would respectfully submit is the highest form of inquiry in this country finding these matters.

We would say that the fines for the building and construction industry flow directly from the recommendations of Cole.
In fact, there were four tenets that Cole came up with that underpin the current regime and one of them is that penalties for breaches must be increased substantially so that conduct which is not permitted attracts serious consequences.

That is something which underpins the rule of law and something which Mr Wilcox himself found has not yet been put in place.
Senator CASH—I want to take you now to the definition of ‘building work’, which you say has been narrowed to exclude work performed off site thus limiting the ambit of the inspectorate’s authority.

The Hon.

John Lloyd also did not agree with the change in the definition of ‘building work’.

Can you elaborate on why you say the narrowing of the definition is not appropriate?

Mr Calver—Certainly.

This is dealt with in paragraph 5.3 of our written submission.
We say that there are several examples where both on-site and off-site work regularly occur and they cross over—that is, tilt up concrete panels, joinery businesses, glazing and glass-cutting activities.

They operate so there is both on-site and off-site work undertaken through the same business, depending on the building project.

Those activities should be covered by the legislation.
It is especially necessary for those companies that might employ dedicated on-site or off-site teams where inconsistent obligations could arise across their workforce.
If you go back in history not that long ago, in the Saizeriya Japanese food dispute in Victoria only the suppliers were targeted, yet Victoria and Australia missed out on a very large amount of investment because the Japanese investor was thrown off balance by the fact that the interruptions to supply could occur and that industrial relations could become the No.

1 constraining issue.


For all those reasons we believe that off-site work and on-site work should be covered, and certainly that is what Cole recommended.

Senator CASH—You also say that the fundamental problem with the apparatus established by the bill is that the specialist inspectorate lacks the independence it needs to be effective.

Why does a specialist inspectorate need independence to be effective?

Mr Harnisch—That is the fundamental reason why the ABCC has been effective.
The additional processes that are being proposed simply make the whole process very complex.

There are many parties involved and the ability for the inspectorate to act has simply been watered down, and hence our comment that it has lost its independence.

Mr Calver—We support the retention of the requirement that the minister not be permitted to provide directions about particular cases, which is in the legislation.

That is absolutely fundamental.


However, the powers that are in proposed section 11 of the bill, which we did discuss at paragraph 5.5 and following of our submission, show that the minister’s interference could be such that, in setting the policies, programs and priorities of the director—that the agency itself follows—there could be a political direction to an organisation EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 43 of this kind.
That is one of the reasons that we think in the reframing of the objects of the legislation the focus that is currently on unlawful industrial action is just not there in the proposed bill.

In addition, there could be potentially conflicting directions from the advisory board.
With directions coming from every which way it is much better for an agency that has these powers to exercise them within clear boundaries and there is no political interference, particularly in individual cases—and this is reinforced in the bill.

Senator CASH—So you are saying that under the proposed regime there is the potential for interference?

Mr Calver—Yes, by both the minister and the advisory board.
That is particularly dangerous in relation to the advisory board, given that we do not know who is going to be on that in respect of three of the places.

Mr Harnisch—Our concern is that it is all about good corporate governance.

It has nothing to do with this particular bill; we would say that about any other bill which proposes similar additional input.
Senator CASH—You also say that the inspectorate is no longer required to publish records of noncompliance incidences in situations where breaches did not go to court.

That has also been raised by other witnesses before us.

What is the consequence of the inspectorate not being able to do that?

Mr Calver—Transparency in its operations.


One of the keys to ensuring that there is an aboveboard method of operation is the requirement currently contained in section 14(2) of the Building and Construction Industry Improvement Act—that there be details of the number and type of matters that were investigated by the ABC Commissioner during the year.

That obligation in particular should continue.

The whole thing is about sunlight.

The best disinfector is sunlight.


That is exactly the same principle that guides Master Builders’ policy in regard to the bill.

There should be open and transparent operations but during the investigations, for the sake of confidentiality and integrity, there should be confidence at that point and there should be an annual report which clearly shows the nature and extent of those investigations.

That is the other reason we do not oppose the safeguard of the Ombudsman.
The parliamentary Bills Digest is wrong in that regard.

We think there are too many protections relating to what the Ombudsman does, but we do not oppose the protection of the Ombudsman’s involvement because of that transparency issue.

Mr Harnisch—Our comment would be similar to other agencies.

The tax office does it.

As Mr Calver said, it is about transparency; it is about making it all open.
Senator CASH—We heard evidence this morning from the Australian Industry Group that Justice Wilcox recommended extensive safeguards on the use of the compulsory examination powers but he did not recommend that the powers be able to be switched off.

They then say that division 2 of the proposed bill would negatively change the risk profile on projects.

Do you have any comment on the switch-off powers?

Mr Harnisch—We have already made comments publicly.

We were surprised.
We were surprised.

It certainly was not something that Justice Wilcox made recommendations on or even alluded to.

We are surprised about the ability to switch off for good behaviour.

Our view is as simple as this: if you do not break the law, you have nothing to fear.

The switching-off powers are somewhat bemusing.

Senator CASH—My understanding with the switching-off powers is that you can also apply to have them switched off before a project has actually commenced.

How does that work?
How does that work?

How do you see that working in reality?

Mr Harnisch—Are you looking at it practically or technically?

I understand the technical process but, given the unfortunate history in this industry, we would see employers being reluctant participants in that process.

Mr Calver—There may well be pressure on building industry participants to put a provision in enterprise agreements that requires them to seek as interested persons the switching off of these powers.
There is an argument that under section 172B of the Fair Work Act that would be a matter which pertains to the relationship between the employer and the union, and therefore permissible as an enterprise agreement.

We do not believe that that should be the case and it raises the industrial stakes yet again through the backdoor.
We also think that it is quite extraordinary in a number of ways, starting with what Mr Harnisch put in his opening address to you—that is, it is an impermissible delegation of parliamentary power, which breaches the fundamental tenets of the rule of law that the law should be in advance predictable and applied in a manner which is not arbitrary.
The second issue is that if this legislative package is to be financially neutral and yet you have the establishment of this bureaucratic office of the independent assessor, presumably with staff, what does that do?
It sucks away resources from the fundamental basis upon which the ABCC now operates and would mean an EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 44 Senate Monday, 31 August 2009 obvious watering down and lesser backbone for the tough cop on the beat because of the dispersion of resources, especially when you combine that with its new enforcement of safety net entitlements that Mr Harnisch also mentioned.
There are also many unanswered questions about the way that this particular part of the legislation will operate, albeit that the Deputy Prime Minister was kind enough to write to this committee with suggestions about how the regulations would look, until you actually see the regulations in a draft that is a mere postulation.

There are a large number of question marks about the way that this unnecessary bureaucracy will operate.
For all of those reasons we devoted a large number of paragraphs in our submission just saying why we believe that this is not called for and, as Mr Harnisch said, that it is hopeless bureaucracy—it goes from page 18 through to page 24 of our submission.

Senator CASH—We also heard this morning from AiG in relation to the five-year sunset provision— Senator ABETZ—Before you go on, Senator Cash, can I quickly ask one?

Senator CASH—Yes.
Senator CASH—Yes.

Senator ABETZ—Say a construction company has quoted for a job, won the contract and then before actual work commences application is made for the switch off.

Can you see any practical consequences flowing from that?

Mr Calver—Certainty is everything.

Certainty underpins the rule of law.

Certainty underpins the costing of risk.

I mention this Saizeriya case again.


One thing that frightened those Japanese investors off was the uncertainty of investing in Australia in that industrial relations climate that existed.

If it is uncertain then it will increase the risk profile and would likely increase the cost of building projects.

Mr Harnisch—I think the risk would also be increased.
If we are assuming that previous behaviours by certain aspects of the building unions will remain, the real concern is the undue pressure that may well be brought upon the contractor in agreeing to the switching-off powers.

Senator CASH—In relation to the five-year sunset provision applicable to the compulsory examination powers, AiG say that that should be deleted as do a number of other witnesses and replaced with a review after five years.

What is your association’s position on that?


Mr Harnisch—Our position is that the tough cop on the beat or laws that support the tough cop on the beat should remain until circumstances are such that demonstrate there is no further need for them.

If that happens to be tomorrow then it would be tomorrow.

If that happens to be in 20 years time, unfortunately then it has to be in 20 years time.
Certainly they need to be reviewed for good corporate governance and democracy, but our fundamental tenet is that if the unlawful behaviour remains then the laws should also remain.

Senator SIEWERT—There has been a lot of comment that we need this legislation for productivity, yet Professor Peetz in his submission makes some persuasive arguments that in fact there has not been an increase in productivity as a result of this legislation.

What is your opinion on those issues?


Mr Harnisch—I am sure you will probably argue against it but there have been a couple of studies done by Econtech which clearly show that, on a macro, economy-wide basis, there have been improvements.
All the anecdotes we are getting from our members say that there have been improvements as a consequence of the ABCC being in existence, because of greater industrial harmony and the ability to get on with the job, and that has come about without any loss of conditions to the building worker.

So our proposition is based on the studies done that there has been an increase in productivity as a result of the ABCC.

Mr Calver—I would like to add to that.


One of the examples we have chosen, which appears in section 7 in our submission, shows why productivity is linked with these reforms.

The national code and guidelines proscribe unregistered agreements, and they still do.

In paragraph 7.2 of our submission we talk about a former agreement term that was in place called ‘jump-up provisions’.
Basically, if an agreement contained provisions that were less than the agreed so-called industry site terms and conditions, those more favourable provisions would displace the less favourable provisions in a negotiated agreement.

The combined effect of section 64 of the Building and Construction Industry Improvement Act and the provisions of the implementation guidelines that require a site allowance to be specified in any agreement have effectively eliminated those jump-up provisions.
That advances productivity because you do not have individually negotiated agreement rates automatically jumping up to the industry rates.

So immediately there is a productivity effect because, if you negotiated a site allowance below the industry-wide agreement, all other things being equal, productivity should be enhanced.

EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 45 CHAIR—I would like to clarify that, just so that I am clear.
A reduction in the amount you pay in the form of wages or conditions to workers results in an increase in productivity.

Is that what you just told us?

Mr Calver—No.

What I said is that if you have a site allowance that is based on and paid in proportion to the monetary value of the project, which is what these site allowances were, they go up automatically depending upon the size of the project, despite any particular individual negotiation that puts them lower than that.
To have them automatically jump up to that higher rate, in the absence of any other external factors, will negatively influence productivity.

CHAIR—So that is what you have just told me.

If you do not actually pay more— Mr Calver—That is not the proposition I am putting.

I am giving one specific example of where there is an industry standard that requires the client to pay more, despite the fact that there might be a collective agreement that justifiably pays less.
It is not a linkage at all, in our minds, to workers being paid more automatically increasing productivity.

No.

I am just talking about this arbitrary notion of the jump-up rates being set on an industry basis that has no reference to productivity.

It is proportional only to the value of the project.

If you can actually pay workers more, and both the employer and the employee say that that is paid out of additional productivity, that payment is justified.
There is no ideological line of the kind that is being implied, that paying workers less equals more productivity.

CHAIR—I will look at the Hansard because I am still not clear on what you have actually argued with me.

Mr Calver—I am quite anxious that we engage on this.

What further would you like me to provide?

CHAIR—Putting to one side the merit of the jump-up provision— Mr Calver—That is my argument, though.

CHAIR—No.
CHAIR—No.

Whether that provision is there or not, if that does not impact on productivity on the site— you say that because it is not there it is not an automatic payment, therefore if it is not there it is an improvement in productivity.

Mr Calver—No.

The correlation is this.

If you have an allowance that is paid in proportion to the value of the project, no matter what the productivity gains are on that project— CHAIR—Which is what you are saying is the case in some instances now.
Mr Calver—Yes—the rates would be lower than that jump-up rate.

It would jump up to that rate because of this industry-wide agreement, which has no reference to productivity, whereas what we say is that agreements should be structured to take into account productivity.

It is one example of the sort of work practices that, when they are aggregated, lead to poor productivity.
If you have an argument about broad industry productivity then you take it down to the micro level to show that there are adverse work practices that impact negatively on productivity, and if you take those away, all other things being equal, there should be an increase in productivity.

CHAIR—All right.

Sorry for interrupting your questioning, Senator Siewert.

Senator SIEWERT—Thank you for following that one up.
I want to move on to the issue we have been talking about earlier today about claims that the ABCC has largely followed up on employees and has overlooked employers and failed to follow up suggested misconduct from employers.

Have you a comment to make on that?

Mr Harnisch—I am aware of the claims.

All I would do is refer you to the ABCC data, which would not substantiate that claim.

Senator SIEWERT—I beg your pardon—that what?

Mr Harnisch—That it was all employee focused.


In fact, the ABCC does look at employers.

I do not have those statistics in front of me but I understand Mr Lloyd is going to be appearing later today and you can ask him that question.

Senator SIEWERT—What have your members reported in terms of their interaction with the ABCC?

Mr Harnisch—In what sense?

Senator SIEWERT—Have any of your members been followed up by or had contact with the ABCC?

Mr Harnisch—Yes, they have.


EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 46 Senate Monday, 31 August 2009 Senator SIEWERT—In relation to their activities or their employees’ activities?

Mr Harnisch—Both.

Senator SIEWERT—What is the nature of the employers’ contact?

Mr Harnisch—We do not get involved in individual cases.

From what they have said to me, many have had regular interaction with the ABCC.
They are matters that we do not get involved in because we do not get involved in the business of individual members.

Senator SIEWERT—So you would dispute Federal Court judge Justice Spender’s comments about the ABCC not taking seriously issues against employers?

Mr Calver—First of all, that comment was made ex officio.

The case had concluded.

It was not necessary for him to make that case.

It was made in the context of him being angry with the particular person who came forward.
It seems to us to be entirely irrelevant to the underlying thrust of the legislation.

Certainly a number of our members have been prosecuted in respect of strike pay.

The focus of the legislation is on unlawful industrial action.

However, Mr Lloyd, who is here, will be able to give you statistics about referrals to other agencies, because obviously the Fair Work Ombudsman at the moment takes prosecutions in respect of Fair Work instruments and those matters which are directly in the eye of the employer.
So without those statistics it may well look as if this is one-sided legislation.

It is not.

I am sure that the referrals to both the police and to the Fair Work Ombudsman would be readily available.

Senator SIEWERT—Thank you.

I want to follow up one further thing.

Evidence presented by Mr Quinn just prior to you about the company’s contact with the ABCC about right of entry provisions and you have just made a comment about strike pay.
A lot of the other comments we have received have been about underpayment by employers—in other words, not meeting their obligations.

Have you looked at that side of things, at other employer obligations not being met?

Mr Calver—The issue arises in two contexts.

The first is the implementation guidelines and the requirement under those where the ABCC’s powers are derived from the contractual terms and conditions that apply to Commonwealth work.
Our members deal with that frequently in the context of the ABCC seeking for them to correct matters such as contractor payments.

That role is largely advisory and leads to our members reporting to us that there are a number of on-site changes that are made, particularly if the ABCC finds there has been an underpayment or otherwise.
The jurisdiction of the ABCC is not to prosecute safety net instruments, but my understanding from the ABCC and its official publications is that it refers matters, as I mentioned to you, regularly to the police and to the Fair Work Ombudsman and its predecessors.

So those statistics I think will be an important element in your assessment of the manner in which those complaints are handled.
Obviously the bill seeks to extend jurisdiction of the new entity to enforcing those safety net entitlements, so that statistic might also be useful in your committee being able to assess the number of resources that will be taken away from the fundamental purpose which the ABCC now fulfils.

Mr Harnisch—I have two other points.

There are other agencies that deal with noncompliance in the area of taxation and superannuation.
Secondly, Master Builders does not condone noncompliance with any part of the law.

We have certainly been on the record many times saying that if one of our members or an employer breaks the law then they should face the consequences for doing so.

CHAIR—ACCI this morning told us that in their view the genie was back in the bottle.

They have already put out a press release saying, ‘Keep the genie in the bottle.’ They were referring to workplace relations issues or noncompliance.
They then went on to say that in their view there are now only pockets of problems.

You seem to paint a much more extreme view of the industry than that, and I am just wondering whether that is a fair assessment or not.

Are we now talking about pockets of problems?

Mr Harnisch—There are examples of extreme behaviour.

Can I just make the point that this is a great industry that provides jobs for many.

It is a great contributor to the economy.


It is currently helping this economy beat the recession and be a great economy.

I do not want to be talking down the industry.

But there are, unfortunately, elements within this industry that engage in extreme behaviours, and that is why we require the specialist laws.

Until those behaviours are rid of, the law must remain as we see them under the ABCC.

Mr Calver—Mr Wilcox said the work has not been done.
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 47 CHAIR—I can get Mr Wilcox’s opinion from what he has written.

That really does not help me much in terms of the question.

What is the extent of the problem as you describe it?

You have not really described the extent of the problem for me.

Is it pockets of problems or is it widespread?

Mr Harnisch—The most definitive description of the problem of recent times is within the Cole royal commission.
CHAIR—That goes back a while now.

I know people say that, but the whole argument that you are putting to us is that since the introduction of the ABCC things have happened and things have changed, and it needs to be ongoing.

That is your view.

That was post Cole royal commission.

I am keen to get an assessment.

You do not have to give me the answer.

As I said, ACCI gave us this view that the genie was back in the bottle and there were pockets of problems.
Again I say to you that the picture you have painted today is much more extreme than that.

I am just wondering whether you want to put some context into your concerns.

Mr Harnisch—The concerns that I am expressing are the concerns that are expressed by my members.

They are not my views; they are the views that they put to me.

I do not speak singularly on problems within this industry.

I am getting constant advice that the problems still exist.
In fact, as I said many times in my press statements, the unions are now more emboldened in terms of their industrial action.

CHAIR—I was going to say: it is actually getting worse.

Mr Harnisch—Yes, that is the view of our members.

They are very fearful that the bad old days will come back.

CHAIR—Fearful that they will come back or that they are already coming back?

I thought you said that you think that the unions are more emboldened now.

Mr Harnisch—Yes.
Mr Harnisch—Yes.

They are telling me that they are getting a lot more visits from union officials.

They are being encouraged—if I could put it that way—to recognise the fact that the new world is here and that 1 February 2010 is coming.

Senator ABETZ—Could I ask a very quick question, if I may.

Is the culture in New South Wales and Queensland, from your experience as a nationwide organisation, somewhat different from the culture in Victoria and Western Australia?
Mr Harnisch—Yes, but that is not to say that Queensland and New South Wales are without problems.

Senator ABETZ—Thank you.

CHAIR—Thank you for your submission and your presentation to the committee today.
Proceedings suspended from 2.45 pm to 3.00 pm NOONAN, Mr David John, National Secretary CFMEU Construction and General Division ROBERTS, Mr Thomas, Senior National Legal Officer, CFMEU Construction and General Division THOMPSON, Mr Glenn Andrew, Assistant National Secretary, Australian Manufacturing Workers Union CHAIR—Welcome.

We have your submission.

Do you have any alterations or additions to make?

Mr Thompson—No.

CHAIR—I understand you each want to make some brief remarks to the committee.
Mr Roberts—Thank you.

I wanted to take a few minutes of your time this afternoon to re-emphasise a couple of the points that we have made in our written submission.

In particular, I want to deal with one of the key recommendations of the Wilcox inquiry, which is reflected in the bill that we are considering this afternoon.
I want to deal with the conclusions that Mr Wilcox came to in respect of industrial action, the way the current legislation deals with industrial action in the construction industry and the way he concluded that that sort of action should be dealt with, which is now reflected in this bill.
As we are all aware, the bill proposes that the key provisions that deal with industrial action in the current act be repealed and that industrial action in the construction industry be regulated by the provisions which are now in the Fair Work Act that regulate such action.

I want to deal with that because I want to emphasise to this committee that Mr Wilcox did not come lightly to the conclusion that he did in this respect.
I can say that because I participated in the debates that His Honour convened at the Sydney university law school and University of Western Australia law school where this issue was debated at some considerable length.
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 48 Senate Monday, 31 August 2009 I can also tell the committee that His Honour was at some pains at the conclusion of each of those law school debates to invite the employer side of the argument to put any further views which would lead him to the view that separate legislation was necessary in the case of the regulation of industrial action in the construction industry to him in writing.
Ultimately, His Honour came to the conclusion that that legislation was not necessary.

The employers, I think, have used this inquiry as an attempt to have a second bite at the cherry, so to speak, to circumvent the conclusions that Mr Wilcox came to.

In seeking to put that argument, I think that the submissions that have been made to this inquiry are misleading, incomplete and inaccurate in a number of important respects and they do warrant some additional comment.
The first submission that the employers seem to put is that separate laws regulating industrial action are necessary because the Fair Work Act definition of industrial action is confined to action by employees and the building industry legislation is not.

This somehow means that conduct by unions is not conduct which is caught by the Fair Work Act and the way it treats industrial action.

That is patently not the case for a number of reasons.
Primarily, we need to be clear in our own minds that the prohibitions that exist in the Fair Work Act at the moment are not confined to employees engaging in industrial action but extend to unions or anyone else who is organising such action.

For example, section 417 of the Fair Work Act prohibits organising or engaging in industrial action during the nominal term of an agreement.

So it is clearly not confined to conduct of employees only.
Likewise, under section 418 of the Fair Work Act, orders which must be made by Fair Work Australia are made not just where action is being engaged in by employees but where such action is ‘being organised’ or ‘is threatened, impending or probable’.

So, clearly, the scope of the Fair Work Act, and the work that it does in regulating industrial action in industries generally, is not, as the employer submissions would have you believe, confined to conduct being engaged in by employees only.
Secondly, the employer submissions, in particular submission No.
12 from the Australian Mines and Metals Association, has something to say about the question of injunctions and injunctive relief, which is available under the Fair Work Act, and how that might be counterposed to the arrangements that exist in the current legislation, and attempts to draw the argument out that the separate treatment in this area that the current act provides is necessary for the proper regulation of industrial and other action in the industry.
We say that there is ample opportunity available, there is ample scope available, under the Fair Work Act to seek and obtain injunctive relief if someone alleges that there is action taking place that might warrant the granting of that sort of relief.

I point to three provisions in particular in that area.

Firstly, wherever industrial action is being organised or engaged in during the nominal term of an agreement, section 417(3) provides that injunctive relief is available.
Secondly, wherever an order to stop industrial action has been contravened, section 421 of the Fair Work Act also permits injunctive relief to be granted.

Thirdly, wherever pattern bargaining is taking place, and employee industrial action is threatened, impending or probable, section 422 of the Fair Work Act now provides for injunctive remedies in that respect.

So, in our submission, there is simply no work left for the building industry legislation to do.
That was the conclusion that Mr Wilcox came to, and it was a very well reasoned conclusion after all sides had a good opportunity to put their best foot forward on those fronts.

Thirdly, can I make some mention of the submissions as they relate to the other penal provisions that exist in the current legislation.

In particular, there are submissions about the additional remedies for coercion in the context of agreement making under the building industry legislation.
Firstly, can I say that the employers seem to be a little bit at odds on this point.

Some of them make the submission that it is necessary for these provisions to be maintained.

But some of them, in particular the Australian Industry Group submission, make it very clear that they—the AiG, at least—are satisfied that the Fair Work Act does all the work that is necessary to be done on the topic of coercion in the agreement making process.

That position is made very clear in their submission.
However, there are some submissions that attempt to put the view that additional provisions are needed and that the repeal of those provisions, which is one of the consequences of the passage of this bill, would be a retrograde step.
In one of those submissions the argument is made that the supposed restricted meaning of ‘adverse action’ in section 342 of the Fair Work Act means that some form of action could not be taken in an agreement making process which would have the effect of coercing a party to make or vary an agreement but would not be caught by the section because it is not adverse action.
We say that that submission is simply wrong, firstly because we dispute the idea that the range of action which is defined as adverse action is narrow—it is not—but primarily because it confuses the work which is EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 49 done by section 342, which sets out the meaning of adverse action for the purpose of section 340, which is the general protection of workplace rights provision, with those in section 343, which provides the specific protection against coercion in agreement making—and that section refers to any action, not just adverse action, as supposedly narrowly defined.
The explanatory memorandum of the Fair Work Act makes clear that section 343 prohibits any action, not just adverse action, taken with the intent to coerce another person in the agreement-making process.

For those reasons we say that the employers’ submissions in that respect are misconceived.

Finally, I want to say something briefly on the way the bill proposes to deal with the question of penalties.
Firstly, His Honour Justice Wilcox in his report made the very real point that the impact of industrial action is not unique to the construction industry.

Industrial action has consequences—and they are serious consequences—across a range of industries, and simply pointing to industry specific factors is not a real justification for treating industrial action in one industry any differently from industrial action in another.
Secondly, there is some real uncertainty, which we have pointed to at the edges, where you have two streams of penalty provisions operating concurrently.

It is a matter that creates a deal of uncertainty amongst employers and employees when they are contemplating which particular penalty regime their action may or may not fall within.
We heard earlier today repeated references to the royal commission’s recommendations on the question of penalties, but what we did not hear was that Commissioner Cole recommended that penalties in respect of employer breaches also be increased commensurate with the penalties that he recommended in respect of industrial action.

Of course, that was not a recommendation that was taken up by the previous government but was something that was swept under the carpet.
The question of penalties raises a much more fundamental proposition—that is, the question of equality before the law.

We have heard a few people speak about the rule of law and what the fundamental tenets of the rule of law are, and in our view there cannot be a more fundamental proposition than the issue of equality before the law.
In this respect, the continuation of a system that treats the same conduct undertaken for the same purposes and with the same consequences with different penalties is something that is so fundamentally contradictory to the concept of equality before the law that we would ask this committee not to contemplate a continuation of that situation.

I will finish there.

Thank you.


Mr Noonan—Our submission is fundamentally, as Mr Roberts has described, about one law for all, but it is actually about more than that.

We have heard a number of discussions this morning about the importance of this industry to the Australian economy, but it is important to nobody more than our members and construction workers because it is the industry in which they make their living and by which they feed their families.
The laws that are essentially being studied here today are not laws which create any jobs in the industry, they are not laws that create one apprenticeship in the industry, they are not laws that improve safety and, despite what you have heard here today, they are not laws that do anything that attract investment into the industry.

The CFMEU recently commissioned a survey by Access Economics about the economic settings of the industry at the moment.
The findings of that survey are disturbing because they predict over the next three years the loss of tens of thousands of jobs, they predict the loss of 6,000 apprenticeships in our industry over the next three years and they make the point that some of the investment settings in our industry are damaging.

I have brought some copies of the report along for members of the committee who may be interested in having a look at it.

Why is that relevant?


We think it is relevant because the legislation which this bill seeks to overturn, if you like, is legislation which is based on a backward-looking ideological view of the building and construction industry, one which is based on conflict and one which is based on the government intervening on behalf of employers and capital against working people.
That is best borne out by the fact that, despite having the power to do so—in fact, we would say the obligation to do so—under the Building and Construction Industry Improvement Act, the ABCC has never prosecuted an employer for underpaying a worker, for unfairly dismissing a worker or for any of those sorts of matters.

As we have heard today, the prosecutions against employers have all been for matters like strike pay, coercion in relation to entering certified agreements and so on.
It is not good enough to say, ‘We’ll give those matters over to the Workplace Ombudsman’.

The legislation provided the role for the ABCC to do that.

It has failed to do so, and therein is exposed the fact that it is fundamentally an ideological organisation which intervenes against workers and their unions.

We have heard further today some discussion about productivity.
In fact, the evidence is that the building and construction industry in Australia was at or close to world’s best practice at the time the Cole royal EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 50 Senate Monday, 31 August 2009 commission was taking place.

There had been numerous surveys running up to that time, but perhaps I can just quickly refer senators to a paper that was produced by independent academics for the Cole royal commission, but was seldom mentioned afterwards.
It is discussion paper 15 prepared by Unisearch.

It says a couple of things which, if you have time, I would like to put into the record.

CHAIR—I just want to make sure there is enough time for questions.

Mr Noonan—I understand that.

CHAIR—But, yes, go ahead.

Mr Noonan—It is two paras, and the document is publicly available.
It says this: In terms of cost performance, Australia’s building and construction industry has been rated highly in international research comparisons and published series on construction costs.

The most common ranking for Australia was second place (across fourteen listed comparisons).

In two studies, Australia was ranked highest.


While the error margin in most of these comparisons is at least ± 5%, Australia fell within the group of countries with a clear competitive advantage in the majority of studies described.

In terms of productivity, international research comparisons indicate that Australia is on a par with Japan and Germany in value added per hour, performing slightly better than France and the UK, but lagging behind the US, Canada, and Singapore.
In value added per employee the picture is similar, with Australia on a par with Japan, performing slightly better than the UK, Germany and France.

It goes on to discuss the US, Canada and Singapore, but makes the following point: Both indicators show an upwards trend in Australia over the 10 year period shown.

That is from 2002.
That is from 2002.

I think there was a question, perhaps asked by Senator Abetz, previously about the question of productivity growth through the 1990s, prior to the Cole reforms, and there is some independent research on that question.

We think this is important because Econtech and their surveys have provided one of the main arguments for the proponents of this legislation.
If you read Professor Peetz demolition of the Econtech report, if you look at what Wilcox said about Econtech, if you take into account the fact that Econtech have relied, for source data, on things like a right-wing blogger who happens to write for the Institute of Public Affairs who has no relevant expertise in economics or the construction industry, and that they have acknowledged arithmetic mistakes in their figuring, then I think it is very clear that the Econtech report stands totally discredited.
This is important because we need to talk honestly about productivity in our industry.

It is some years since any work has been done on this.

In fact, I think the last authoritative study of this is the one I have just pointed to.

We are saying to employers, to this committee and to the government that we need to look honestly at this and we need to benchmark where productivity is in this industry in a realistic way.
We are very confident that Australia continues to measure up very well internationally as a competitive nation in the construction industry, and you only need to talk directly to contractors that work around the world to know that we have a very productive industry.

I make this point and make it strongly because we are a bit sick of those who want to talk our industry down for purely political reasons.

No industry is perfect.


More than 900,000 people work our industry and not all of them are as pure as the driven snow, be they employers or employees or contractors or developers.

But what is very clear is that there has been a concerted attempt to demonise the industry and the people who work in it.

It ought to stop and it ought to stop now.


At a time when we are facing serious challenges to investment in our industry, we think it is totally inappropriate that a false and distorted picture of the industry is provided to the public.

We ought to be dealing with facts.

We have more than 150 people who have been dragged in front of these coercive interviews.

They are not something conducted at the margins, and the old saying that if you have nothing to hide then you have nothing to fear is not correct.
One hundred and fifty people have been dragged in front of these interviews, various people who work in the construction industry.

The first thing that happens to them when they are brought in is they are threatened with six months imprisonment if they do not answer questions.

For that to happen as a consequence of you going to work normally in a workplace in Australia is fundamentally wrong.
There is a range of complaints that have been brought to us about how people are treated in those interviews, and at the moment they are secret.

We have one worker at the moment who faces imprisonment because he is accused of attending a safety meeting and refusing to talk to the ABCC about becoming an informant against his workmates.
He is not accused of thuggery and violence and corruption and those sorts of things that we hear bandied around by people who appear before this committee; he is accused of attending a safety meeting on a EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 51 site which was deemed unsafe by the regulator.

That is in an industry that on average loses one worker every week with a safety record that has worsened under these laws.
In conclusion, I say this: the unions have never opposed a regulator in the industry, but we do oppose an unbalanced regulator with an ideological bias operating under unfair and discriminatory laws—laws which are divisive and, frankly, hark back to the Howard government’s vendetta against unions.
We do need a future in this industry which is based on a real assessment about how we can get on top of the issues around investment, around productivity, around safety and around providing a decent working future for Australian construction workers in which we could have some cooperation with their employers.

I thank the committee.

CHAIR—Mr Thompson, I am going to ask you to be as brief as you possibly can.

Mr Thompson—It will be very brief.


From the Australian Manufacturing Workers Union’s point of view, it is a fundamental right of all Australians to have equity under law.

The issue in relation to the legislation that is currently in place is that it should be, in our view, abolished and the Fair Work Act should be what applies to all workers.

The issue that I want to touch on, and I will not go into too much detail, is the narrowing of the scope in relation to the building industry.
The Australian Manufacturing Workers Union operates in the construction industry, obviously, but represents many tens of thousands of workers in the manufacturing sector.

The practical realities of the current definition of building industry is something that is used against members of ours in negotiations, in sectors and in parts of the industry that do not even work directly in the industry but may supply a component to the industry or raw materials to the sector.
In our view, it is an issue that is used at the bargaining table, and even after bargaining is struck, by employers to claw back what we see as conditions that were negotiated in good faith with our members and with that employer.

Senator ABETZ—Thank you, gentlemen, for your submission.

Are you all agreed that ‘no ticket, no start’ no longer has a role in industrial relations in this country?

Mr Noonan—It is against the law, Senator.

Senator ABETZ—Yes, but as a concept?


Mr Thompson—As I just put on the record, from our point of view, it is against the law.

Senator ABETZ—But you are here telling us how to change the law et cetera because you have certain principles and views that you uphold and you say that the current law offends those principles.
You are not coming to this committee saying, ‘This is the law; therefore uphold it—don’t change it.’ So I find it passing strange that you are saying, ‘It’s the law and we don’t have any view to express about it.’ If you were able to change the law would you be changing the law in relation to that?

Mr Noonan—We would not seek the legislation of ‘no ticket, no start’ and our submission does not do so.
Senator ABETZ—That is legislation, but what about the capacity to include that in enterprise bargaining agreements or by gentle persuasion?

Mr Noonan—We have not discussed that recently in my union, but I would not think that the inclusion of it in EBAs is the way that we would seek to expand our membership.
I find it passing strange that this is a great source of anguish for members of the Liberal Party when they are prepared to pass legislation which compels people to join private health funds or else pay an extra tax.

There seems to me to be some ideological inconsistency there.

Frankly, the issue of ‘no ticket, no start’ is something of a historic issue.

It is dead.

Senator ABETZ—Thank you for that gratuitous advice, but I was interested in your view in relation to ‘no ticket, no start’.
Private health insurance was interesting, but I am not sure all that helpful.

Mr Noonan—I simply wished to draw on an idea about the inconsistency.

Senator ABETZ—Do you agree that the Workplace Ombudsman does pursue the issue of underpayments in a rigorous and robust manner?

Mr Noonan—I am aware that they have pursued some underpayments in the industry.

I am also aware that my union itself pursues a great number on behalf of employees.
But I am also aware that the body which is specifically charged under the laws and under the legislation with pursuing those matters in the building and construction industry has failed to do so.

That is the ABCC.

Senator ABETZ—What I asked was: does the Workplace Ombudsman pursue these matters in a robust and rigorous manner?

EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 52 Senate Monday, 31 August 2009 Mr Noonan—And I answered that question.
Senator ABETZ—And, sorry, I did not get it.

Mr Noonan—I said that I am aware that the Workplace Ombudsman has pursued matters on wages and entitlements.

Senator ABETZ—Yes, you told us that.

But you did not tell us whether in your opinion they did so in a rigorous and robust manner.

Mr Noonan—I would not propose to comment on that.

My experience of them actually pursuing those matters is limited.
Senator ABETZ—You make the comment that the ABCC are an ideological body and, because of their ideology, one would assume therefore that they do not pursue underpayments.

If that was their ideological mindset, one wonders why on earth they would refer these matters to the Workplace Ombudsman, who at every Senate estimates tells us about the millions of dollars they have recovered on behalf of thousands of employees around the country?
So, if the ABCC had an ideological mindset against recovery of underpaid sums of money to workers, why on earth would they be referring to the Workplace Ombudsman, who on all accounts does as very, very good job in pursuing these matters and has a very good record?

Mr Noonan—Perhaps a question is better put as to why they do not do it themselves, given that they have the legislative right and, we would say, obligation to do so.

Senator ABETZ—We can ask them that later.


Mr Noonan—Because it is all right to talk about a tough cop on the beat, but a cop that turns a blind eye to some breaches of the law is not a tough cop.

Senator ABETZ—But it is not a blind eye when you refer it to another body that has specific powers to pursue it, does so and collects millions of dollars for thousands of employees all around the country.

You can hardly say that that is an ideological mindset when the record is there for all to see.
They say they have limited resources, so they flick pass those issues on to another body that does it exceptionally well.

But let us move on to— Mr Noonan—Just on the question of resources, I am aware that their budget allocation last year was just under $35 million, of which they spent $20-something million and returned quite a bit.

It does not seem to me that they ran out of money.

Senator ABETZ—Can I ask in relation to the issue of, as you describe it, demonising certain elements within the industry.
Would you say that the findings of the Cole royal commission were in that category as well?

Mr Noonan—Indeed I would.

Senator ABETZ—And what about Mr Wilcox?

Mr Noonan—Can I just deal with Cole first.

The Cole royal commission is notorious.

It elicited evidence in a particular way and publicised its findings and its hearings in a particular way.
We make no bones—and we have always said, as have many independent commentators—that the Cole royal commission was designed to achieve a particular outcome, which was an attack on the building and construction unions.

Senator ABETZ—And what about— Mr Noonan—And I note that it failed to result in the prosecution of one worker or one unionist for any of the matters that were talked about in its terms of reference—in particular, violence, thuggery, intimidation, corruption and all of those matters.
Millions of dollars were spent and there was not one prosecution.

Senator ABETZ—So you disagree with the royal commission.

What about His Honour Justice Wilcox’s view that the ABCC’s work is still not fully done?

That would suggest that there does need to be a bit of clean- up still occurring.

Mr Noonan—It certainly would suggest that that is Mr Wilcox’s view.

Senator ABETZ—Your view is that there is no clean-up that needs to be done, so you would disagree with Justice Wilcox’s assessment as well?
Mr Noonan—I think you are putting words in my mouth.

What I said was that over 900,000 people work in the building and construction industry and not all of those people are angels and not all of those people always conduct themselves properly.

That is a matter of common sense.


What we do is say is that there is a set EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 53 of laws in this country in relation to matters such as criminal law, competition law and taxation law and we think that people ought to be equally subject to those laws whichever industry they happen to work in.
Senator ABETZ—Would you also disagree with Ms Gillard, who said: … I am sure you were appalled to read of dangerous car chases across Melbourne City involving carloads of balaclava wearing people, criminal damage to vehicles resulting in arrests, threats of physical violence and intimidation of individuals, including damage to a private residence.

She made those comments in her discussion on the building and construction industry at the ACTU congress this year.

So you disagree with that as well?


Mr Noonan—I heard the minister say that.

There are a number of matters which are still in front of the court.

I do not propose to comment on matters in front of the court other than to say, of the many charges which were laid—in the criminal courts, I should say, not by the ABCC—over that matter, a large number of them have now been dropped.
I would hope that those people who still face, as I understand it, a number of charges around traffic offences—and I believe the other one was offensive behaviour—should get their day in court without the continued sort of hysteria which is being generated by some people for political reasons.

Senator ABETZ—Including the Deputy Prime Minister.

Mr Noonan—Including a whole range of people.


Most particularly I would single out the shadow minister for industrial relations, who made an absolutely misleading and appalling speech in the House the other day which was very inaccurate.

Senator ABETZ—Can you mention Ms Gillard as being part of this coterie of individuals?

Mr Noonan—It is notorious, it is well-known, that we do not agree with what the minister said about that question.
Senator ABETZ—So Ms Gillard, Justice Cole, Justice Wilcox and the shadow minister for industrial relations have all got it wrong in relation to the culture that allegedly exists in the building and construction sector?

Mr Noonan—What I have said, Senator, is that there are criminal laws which apply to everybody equally in this country and if people break them then they are subject to prosecution under those laws, and we do not ask that construction workers be treated differently under those laws.
That is what I have said.

But the legislation we are looking at here is not about any of those things.

The only person who is facing imprisonment under this law at the moment is accused of attending a safety meeting on a building and construction site, and that is why— Senator ABETZ—I trust you are not commenting on a matter that might be before the courts.

Mr Noonan—I am telling you what this individual is accused of, Senator.
Senator ABETZ—Because you were just telling me you could not comment on another matter just before, because it was about to be before the courts.

But you feel that you are able to comment on this one.

It is just an interesting observation, Mr Noonan.

Mr Noonan—I am able to comment on the fact that that person is charged over attending a union meeting about safety.

That is notorious; that is on the public record.

That is what he was charged for— Senator ABETZ—Can I ask you one last question, then.
Mr Noonan—The argument that is made in favour of these laws constantly reverts back to often unsubstantiated and hysterical allegations about criminality, violence, corruption and so on— Senator ABETZ—Like Ms Gillard.
Mr Noonan—and yet these laws have absolutely nothing to do with any of those matters and are incapable of being used to prosecute any of those matters, and my view is that those who are the proponents of these laws continue to refer to those matters because they are unable to articulate an argument as to why industrial laws should require the removal of the right to silence and the imprisonment of working people for six months for attending a union meeting.
If people could justify that, they would not be continually returning to matters which are unconnected, unrelated and incapable of being prosecuted under this law.

Senator ABETZ—Yes, but the right to silence does not apply to either employers or contractors under this legislation.
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 54 Senate Monday, 31 August 2009 Mr Noonan—No, but it does apply to people who are charged with violence, it applies to people who are charged with corruption—it applies to all sorts of people—but it does not apply to building workers who are accused of attending a union meeting.
Senator ABETZ—You tell us in your submission under section 3, ‘Retention of coercive powers’, paragraph 3.1, ‘Coercive powers have no place in industrial law.’ Do you believe that coercive behaviour has any place in the industrial landscape?

Mr Noonan—What do you mean by ‘coercive behaviour’, Senator?

Senator ABETZ—The fact that you have to ask me that, I think, says it all.

Time is out for me.

We will pass on.

Mr Noonan—Well, it says nothing.

I am sorry; I will not be verballed.


‘Coercive’ can mean different things— Senator ABETZ—All right.

Do I have time, Chair?

Mr Noonan—in a legal sense.

Senator ABETZ—All right.

‘Coercive’ as in threats of thuggery, bricks through windows, the sort of behaviour that was referred to in the Federal Court decision by His Honour Justice Jessup on the Westgate Bridge case, the examples enumerated by Justice Cole in the royal commission—I can go on at some length, if you want specific examples.
Mr Noonan—Okay.

I will answer that question.

Senator ABETZ—I would have thought, under most definitions, that would be seen as somewhat like coercive behaviour.

Mr Noonan—I would think that it was worse, if it was true; and it would be criminal behaviour in relation to threats of violence or bricks through windows or any of those things.

The trade union movement, and my union, do not support any of those things, and it should not be represented for one minute that we do.
Senator ABETZ—So what action have you taken against Kevin Reynolds and Joe McDonald?

Mr Noonan—What allegation do you make against them, Senator?

Senator ABETZ—They are not on the public record, I assume.

Look, time is up.

CHAIR—I am not sure where that was going.

Senator Siewert.

Senator ABETZ—Well, if you do not— CHAIR—No, I do not know where— Senator ABETZ—I am more than happy to discuss Kevin Reynolds at some length, and Joe McDonald and Craig Johnston.

We have got some good examples to throw up.


CHAIR—You can do all those stunts outside of a Senate inquiry, so let us get back to the issues in front of us.

Senator Siewert.

Senator ABETZ—I am sure that is an independent chair, referring to stunts!

CHAIR—No, it is just an observation of what is happening right now.

Senator ABETZ—Of a former ETU official.

CHAIR—Senator Siewert.

Senator SIEWERT—I want to go to the issues of OH&S and follow up on the comments you made earlier.
I am aware that you have been here for most of the day listening to the evidence.

You will be aware that I have asked this previously of some of the employer organisations.

I would like to follow up the comments that you made.

Do you have some stats around how the situation has changed since this act was introduced?

Mr Noonan—I do not have statistics with me.

I can supply what we have on notice.


I can say that there has not been an improvement in safety or in fatalities in the industry over the last few years.

The ABCC itself and the legislation do not particularly go to safety, other than through the establishment of the federal safety commission.
We do not complain about the establishment of the federal safety commission, but we do say that the concern that working people have about standing up for their rights on site as a result of the oppressive laws which exist have done nothing to improve safety on site.
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 55 Senator SIEWERT—That is the issue that I was particularly keen on following up, because those were the issues that were raised during the debate on this legislation a number of years ago.

The issues were that the legislation could in fact put people off raising safety issues and that unions were less likely or able to deal with on-site safety issues.

I am particularly keen on looking at this.


Have you or any of your members looked into those issues and collected data on them?

Mr Noonan—We have attempted to collect data on a contemporary rate of how many people in the industry are killed.

Safe Work Australia—I think its predecessor body—do collect some statistics around that, but we think they somewhat understate the problem.

We are struggling with trying to get an accurate picture of that.
We will provide to you on notice everything we have on that.

Senator SIEWERT—That would be appreciated.

There are issues around whether you think this legislation is consistent with ILO conventions.

Mr Noonan—Firstly, can I say that the current legislation is clearly not and the ILO have said so on six occasions now.

Given that Australia has freely ratified those ILO conventions, it seems to me to be a pressing reason to change the law.
We would do that if we had any regard to ILO conventions and standards at all.

In relation to the new act—and I am not a lawyer; my colleague Mr Roberts is—I think it is likely that the ILO would be asked to test whether or not these laws complied.

I think I heard Ms Bowtell from the ACTU today say that in her view they probably would not.

Senator SIEWERT—Sorry—I was taking it as read that we understood that the current act did not comply with ILO conventions.
Mr Noonan—The ILO have said so on I think six occasions now.

Senator SIEWERT—Thank you.

Can we go back to the issues around coercive powers and ‘switching on- switching off’.

I understand your position would be that they should be removed from the act altogether.

If it were reversed from the way it is currently in the bill, would that be a more satisfactory situation?

That would be so that you would have to turn on the powers rather than turn them off.
Mr Noonan—Our opposition to coercive powers is fundamental.

We have not taken the view that we are going to endorse coercive powers in any way, shape or form.

I think that the whole question of ‘switch on- switch off’ is a strange one.

It seems to us that currently, in the way it is structured, unions and employers could spend quite a bit of time having arguments about whether or not coercive powers ought to or ought not apply to a particular project.
In essence, we would be asked to go from project to project making a case as to why our members on that particular project should have the fundamental rights that everyone else in the country takes for granted.

I think they are slightly problematic.

If it were ‘switch off’, it might be a bit better.

But we are not going to be here endorsing any set of coercive powers that discriminate against one section of the community—in this case, those that work in the building and construction industry.
Senator SIEWERT—My next question— CHAIR—This will be the last one.

Senator SIEWERT—okay—I know is a little bit tricky because of the issues around silence of workers as they interact with the ABCC.

I am trying to phrase this in terms so as to not get anyone into trouble.

Have you had a large number of your members raising concerns around the ABCC and their interaction with the ABCC?

Mr Noonan—Yes.

I have had one member—and I will speak about this fairly carefully—who is a person known well to me.
He came out of a hearing with the ABCC extremely upset and has had to have counselling as a result.

I may be breaching the act; I do not know.

I hope I am not.

He told me that he was humiliated about the fact that he came from a non-English speaking background and that people in the interrogation were laughing at his command of the English language.

He said that he came out feeling less than a man.

Senator SIEWERT—That is a specific example?


Mr Noonan—I am not sure whether or not he is still under caution, but he told me that much.

If that is enough to get me in trouble, so be it.

It is true.

Senator SIEWERT—Have you had other instances over the period of time that this act has been in place?

Mr Noonan—There has been a documentary made called Constructing Fear, which I would recommend to all of the senators.

If you have not had a look at it, it is worth a look.
You will see there one person who was in an interview in Western Australia.

He talked about having very personal questions asked of him in the interview about his family and about his life, and he found that offensive.

I am aware of another instance, not EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 56 Senate Monday, 31 August 2009 in terms of the coercive powers but in terms of how the ABCC operates, where inspectors from the ABCC went to a worker’s home.

He was not at work.
He was not at work.

He was at home; he was inside.

His 10-year-old son was out the front, and the ABCC inspectors prior to speaking to the parent started asking the 10-year-old boy whether his father was at work, whether his father was off sick and what he was doing.

We have seen some fairly intrusive and, I would say, obnoxious behaviour.

CHAIR—I am afraid we are going to have to leave it there because we are out of time.

Senator FISHER—Chair, may I ask one question?

CHAIR—No.
CHAIR—No.

We are actually over and out of time.

Senator FISHER—May I put it on notice?

CHAIR—You can.

You can do that through the secretariat.

Thank you for your submission and your presentation to the committee today.
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 57 [3.48 pm] CULLY, Mr Peter James, Branch Manager, Workplace Relations Legal Group, Department of Education, Employment and Workplace Relations MAYNARD, Mr Michael, Group Manager, Workplace Relations Implementation Group, Department of Education, Employment and Workplace Relations WILLING, Mr Jeff, Branch Manager, Building Industry Branch, Department of Education, Employment and Workplace Relations CHAIR—Welcome.
Mr Kovacic was on our program.

I think he has been moved upstairs.

Mr Maynard—Mr Kovacic has asked me to convey his apologies to the committee.

He is currently acting secretary of the department while Ms Paul is with the Deputy Prime Minister on her trip to India.

CHAIR—Thank you.

Senator ABETZ—So he doesn’t really apologise, does he?

Mr Maynard—He does, Senator.

Senator FISHER—You can tell him we missed him!

Mr Maynard—I will, Senator.


CHAIR—Is there anything you would like to add to the capacity in which you appear?

Mr Maynard—I am currently Acting Deputy Secretary, Workplace Relations.

CHAIR—We have received your submission.

Do you have any additions or alterations for us?

Mr Maynard—No.

CHAIR—Thank you.

On that basis, we invite you to make some opening remarks.

I suspect you would want to address some issues from the submissions to this inquiry that have been received by this committee.
I invite you to do that now.

Mr Maynard—Thank you very much for the opportunity.

The Department of Education, Employment and Workplace Relations would like to acknowledge Mr Carter’s significant contribution to this committee over some 11 years.

It is wonderful to see a public servant doing such a terrific job in facilitating the parliamentary processes and doing it with such distinction and quiet professionalism.
I also thank the committee for providing the opportunity to participate in today’s hearing.

I have a short opening statement in relation to some of the key areas of contention raised by this inquiry.
The bill under consideration by the committee seeks to implement the government’s pre-election commitment set out in the Forward with Fairness: policy implementation plan to maintain the Office of the Australian Building and Construction Commissioner until 31 January 2010 and, following that date, to replace the ABCC with an alternative specialist regulator.
The new regulator, the building industry inspectorate, like the ABCC, is a separate statutory body reporting directly to the minister with a dedicated workforce focused solely on the building and construction industry and with a separate budget allocation.

The bill formalises the existing tripartite industry forum created by the ABCC via the adoption of the Wilcox report’s recommendation for the statutory creation of a tripartite advisory board.
Following consultation with industry stakeholders, the government decided the advisory board will have a strategic advisory role only.

It has no capacity to give directions and it has no role, directive or advisory, in relation to specific cases.
The building industry inspectorate will continue to have a significant deterrent effect against lawlessness in the building and construction industry, with a dedicated workforce focused solely on the building and construction industry, the same compliance powers as Fair Work inspectors to investigate and prosecute noncompliance with legal obligations and the continued availability of coercive interrogation powers.
Criticism by some stakeholders that the alignment of the penalty levels will decrease the deterrent effect of the inspectorate needs to be considered in the light of the evidence contained in DEEWR’s submission, including that the majority of cases successfully litigated by the ABCC from its commencement to the middle of July 2009 related to the Workplace Relations Act are unaffected by the alignment of penalty levels.
Similarly, the court’s capacity to prosecute noncompliance with its orders through the contempt jurisdiction, as demonstrated by the awarding of a $75,000 penalty for contempt of court against the CFMEU in relation to the EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 58 Senate Monday, 31 August 2009 Royal Children’s Hospital project in Melbourne in 2009, remain unaffected.

A number of stakeholders have asserted the bill will tie up the inspectorate in red tape.
The department does not agree.

The bill contains a series of safeguards in relation to the inspectorate’s use of coercive powers.

It is important to note the safeguards contained in the bill do not apply to or affect the inspectorate’s capacity to exercise its other powers, nor do they affect the speed with which those powers can be exercised.
The safeguards apply solely to the use of the coercive powers which the ABCC uses as a last result after normal investigations are well advanced and, based on the ABCC’s 2007-08 annual report, which it uses in less than nine per cent of investigations.

The safeguards provide protections for all parties involved in the use of the powers.
For example, persons subject to compulsory interrogation have the right to legal representation and the ability to claim legal professional privilege and public interest immunity.

Similarly, the inspectorate is protected from criticism of inappropriate use of coercive powers by the independent verification of the appropriateness of the use of the powers by a presidential member of the Administrative Appeals Tribunal.
This obligation has similarities to the existing legal services direction obligation that the Commonwealth obtain independent legal advice prior to commencing legal proceedings.

The capacity for interested persons to apply to have the availability of the inspectorate’s coercive powers switched off on a specified project appears to have been misunderstood and/or misrepresented by some commentators.
The switch off powers of the independent assessor relate only to the inspectorate’s use of coercive powers on a specified project.

They do not affect the other compliance powers the building industry inspectorate will have.

Determinations made by the independent assessor do not affect the inspectorate’s capacity to monitor, investigate and enforce general workplace relations matters in the building and construction industry.
It is important to note that the powers can be switched on again in circumstances where the project experiences industrial unlawfulness.

This can be done via application from the director or another interested person or via the independent assessor making a determination on their own motion.
Any examination notices subsequently issued after the examination period are reinstated when the powers are switched back on and may be used to investigate alleged unlawful conduct that occurred during the time the powers were switched off.

A number of witnesses today have spoken about the fact that this bill will expand the scope of the powers currently available to the ABCC to include ensuring the compliance with employee entitlements.

This is not the case.


The ABCC currently has these powers but has chosen to refer them to the Workplace Ombudsman.

Similarly, some of the witnesses today have spoken about the need for a differing skill set when dealing with employers, unions and employees.

The department does not agree with this position.

It is evident from the Fair Work Ombudsman and, previously, the Workplace Ombudsman, who deal with all three already, that a differing skill set is not required.
In addition, there have been discussions about the passage of this bill meaning a return to the bad old days.

It is important that the committee consider the context of the ‘bad old days’ as used by people when referring to the time before the Cole royal commission.
Significant changes have occurred in the legislation since those days: the requirement for a ballot before taking industrial action, the illegality of taking industrial action during the life of an existing agreement and, most recently with the Fair Work Act, the introduction of good-faith bargaining and the capacity for parties to take matters to Fair Work Australia.
In closing, I note the bill reflects the government’s decision, which has been informed by the recommendations made by the Honourable Murray Wilcox QC in his March 2009 report and the government’s subsequent consultation with industry stakeholders.

We welcome any questions the committee may wish to ask in relation to the bill.

CHAIR—Thank you.
CHAIR—Thank you.

You were probably here when the CFMEU claimed that separate legislation is not required to please the building and construction industry, because there is a provision in the Fair Work Act to allow employers to claim injunctive relief or remedies in the event that unions or employees engage in any such illegal industrial action.

Can you comment on that?

Mr Cully—That is correct.


Section 545 of the Fair Work Act deals with orders that can be made by the Federal Court and the Federal Magistrates Court.

It includes examples of the orders they can make with an injunction or interim injunction to stop or remedy the effects of a contravention.

CHAIR—And the department is satisfied that there is enough scope?

I think it was Mr Roberts who took us through a quite detailed explanation of where the different provisions were in the Fair Work Act.
Is the position that there is enough legislation in the Fair Work Act to deal with any cases that may arise in the building and construction industry?

EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 59 Mr Cully—Certainly there are a number of provisions throughout the Fair Work Act that deal with industrial action and other unlawful action.

Any of those civil penalty provisions would be capable of having an interim injunction to prevent that conduct.
CHAIR—Have any of the submissions so far called attention to any unintended consequences or necessary refinements to be addressed by amendments?

Mr Cully—In a process like this there have been a number of submissions that have suggested particular amendments to different aspects.

CHAIR—I am particularly interested in knowing whether any have got to the point of unintended consequences where the department is considering recommending amendments.
Mr Maynard—There have been a number of preferences suggested but no errors of unintended consequences that we are aware of.

If there are any we would be open to hearing about them.

CHAIR—The Workplace Ombudsman does not exist anymore, does it?

Mr Maynard—Correct.

CHAIR—I understand that the ABCC referred its work in terms of looking at underpayments and issues of that nature to the Workplace Ombudsman via a memorandum of understanding or a memorandum of agreement.
We canvassed this one year at estimates in great detail.

What is the case now?

The Workplace Ombudsman has ceased to exist.

Is there something else in place or should the ABCC now under the present arrangements be looking at all those matters referred to it by the ABCC Act?

Mr Maynard—Senator, I will defer the answer to that question to the ABCC, that will follow us.

I am not aware of any arrangement that has been put in place, but there may have been one which I am not aware of.
CHAIR—Did any arrangements of that nature automatically follow what was the Workplace Ombudsman?

Mr Maynard—No.

CHAIR—Senator Siewert, do you have some questions?

Senator SIEWERT—Yes, I do.

Some of the issues that I want to raise are probably more policy questions so I will desist from those.

But I do want to ask about the issues around the ILO conventions and whether you have done any assessments for the new bill—I am not talking about the present act, but the new bill—against the ILO conventions.
What is your opinion on its compliance?

Mr Maynard—Ultimately the assessment of compliance with the ILO conventions will be a matter undertaken by the ILO’s committees— Senator SIEWERT—I appreciate that, but what is your opinion?

Mr Maynard—The government is currently preparing a report to go to the ILO and until such time as that is finished I will not be in a position to comment on it.

Senator ABETZ—And you do not have an opinion in any event, do you?
Senator SIEWERT—I know that I am saying it wrongly—has the department done an assessment, I should say.

Your answer is that you are undertaking that for the minister.

Mr Maynard—That is correct, Senator.


Senator SIEWERT—The other issue that I am keen to follow up is the issue that I have been following up all day in terms of OH&S and whether the department has actually done any work on looking at how the situation changed under the BCII Act and whether you have noticed any changes in occupational health and safety stats under that act.

Mr Willing—As people are aware, the act also creates the Office of the Federal Safety Commissioner.
We have had some discussions with the office and they have advised that currently about 150 companies are accredited under the scheme, which they believe covers about 50 per cent of construction employees in the country.

Their statistics indicate that fatality incident rates for these companies are nearly half those of other construction industry companies and workers compensation claims for accredited companies are also significantly lower than the industry norms.
So there have been some very strong positives coming out of the creation of the OFSC.

Senator SIEWERT—Okay.

But only 50 per cent are covered at the moment— Mr Willing—That is correct.

EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 60 Senate Monday, 31 August 2009 Senator SIEWERT—Is any proactive work being done with the companies that are not actually covered at the moment?
Mr Maynard—The Federal Safety Commissioner is charged with promoting the accreditation scheme, and I know that she is very active in that process in encouraging other companies to become accredited.

In other areas of occupational health and safety work, as has already been mentioned, the current harmonisation processes, the government is working with other states and territories to try to put in place harmonised rules which will make it easier for all.
Senator SIEWERT—You will also be aware that we have been having discussions all day about productivity.

Has the department done an assessment?

What is the department’s assessment of whether the act has had a positive or negative effect on productivity?

Mr Maynard—No, the department has not undertaken any assessment of productivity of the building and construction industry.

Senator SIEWERT—As the current act applies— Mr Maynard—Correct, Senator.
Senator ABETZ—Thank you very much and thanks for your submission.

When was the position of Federal Safety Commissioner established?

Mr Maynard—With the creation of the Building and Construction Industry Improvement Act in 2005.

Senator ABETZ—And since that time there has been a considerable improvement with those companies that have availed themselves of that mechanism—is that correct?

Mr Maynard—That is correct.


Senator ABETZ—Occupational health and safety in general terms is a state government issue, isn’t it?

Mr Maynard—Other than the Federal Safety Commissioner’s role, yes, Senator.

Senator ABETZ—So the Federal Safety Commissioner’s role was innovative at the time, in 2005?

Mr Maynard—In moving into the federal jurisdiction?

Senator ABETZ—Yes.

Mr Maynard—Yes, Senator.

Senator ABETZ—You tell us it has delivered substantially.

Thank you for that.
Thank you for that.

What is the name of the successor of the Workplace Ombudsman?

Mr Cully—The Fair Work Ombudsman.

Senator ABETZ—The Fair Work Ombudsman; the FWO.

Are you aware whether that ombudsman, under a new title, still pursues the issue of nonpayment of wages?

Mr Maynard—Yes, they do.

Senator ABETZ—Basically there was a seamless transition; everything other than the letterhead remained the same really in relation to that aspect?

Mr Maynard—No; that would be an incorrect statement.
The Fair Work Act had a range of matters that would have been modified, including the nature of the requirements both on employers and employees in bargaining.

Senator ABETZ—Sorry; I meant in relation to underpaid wages—the collection, the investigations et cetera.

Mr Maynard—The Fair Work Ombudsman continues to be proactive in that area, yes.

CHAIR—The building and construction industry is what we are talking about, though.

We know that is their forward role.


Mr Maynard—It is my understanding that they will investigate, and prosecute where necessary, the underpayment of employee entitlements in any sector.

If there has been an arrangement between the ABCC and themselves in relation to the building and construction sector I am not aware of that.

Perhaps that is a question you might put to Mr Lloyd.

Senator ABETZ—Thank you.


You told us that the legislation for these changes, this amendment bill, was largely informed by the Wilcox inquiry.

I like the term ‘informed’ because it means that certain things EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 61 undoubtedly occurred which were not informed by Mr Wilcox.
Could you tell us whether, to your knowledge, there were any suggestions made by Mr Wilcox in relation to the switching off provisions and the independent assessor?

Mr Maynard—No, Mr Wilcox did not make recommendations in that regard.

Senator ABETZ—Are you able to assist us as to where that input came from?

We are told—indeed you told us—that this amendment bill was informed by Wilcox— Mr Maynard—Correct.

Senator ABETZ—and I welcome that.


I am just wondering who else may have informed the government in relation to the changes that we now have before us.

Mr Maynard—As I noted in my statement, it was informed by the recommendations made by Murray Wilcox and subsequent consultations of the government with industry stakeholders.

Ultimately, all of the decisions are decisions of government and I cannot provide you with any guidance as to who or how many made suggestions about this matter.
Ultimately, it is the government’s decision that this is what they wish to put forward.

Senator ABETZ—I fully accept that.

That is why we elect governments, and I fully agree that governments should not slavishly follow reports or anything of that nature.

They need to make their own decisions.


But when a government is willing to tell us that these matters were largely informed by a certain inquiry and then they go about the business in areas not informed by the inquiry specifically for the task, I suppose in particular an opposition senator is interested to understand who or what else may have informed the government’s decision.

You have told us ‘industry stakeholders’.


Was the department part of those consultations with the government and those industry stakeholders?

Mr Maynard—The department did conduct a variety of consultations following the release of the Wilcox report.

It did coordinate those and provide feedback to government.

I am aware that government also independently had consultations with a broad range of industry stakeholders, and it all goes into the mix.
Senator ABETZ—Was that as a result of the independent consultations or as a result of consultations with which the department was involved?

Mr Maynard—The amount of consultation that occurred included discussions about the switching on and off process, and I am not able to tell you the exact genesis of the idea because I do not know and I do not recall.

Senator ABETZ—Chances are a lot of that was with the independent consultations.
If you were not aware of the genesis of the idea, would it therefore be fair to say that the department’s involvement was at a later stage and not with industry stakeholders suggesting that this be included in the bill, that it was in the consultations in which you partook?

If you partook in those consultations, you would have known where it had its genesis.

Mr Maynard—I would suggest that is a fair assumption.

CHAIR—Was the COIL process activated to discuss these issues?
Mr Maynard—Yes, a COIL was held to discuss a broad range of issues, this being one of them.

Senator FISHER—As far as the department is aware, no industry stakeholder recommended the switch on, switch off—is that correct?

Mr Maynard—I am unaware of the details of consultations held directly between government and industry stakeholders, and therefore I cannot comment on what might have happened in those meetings and recommendations made at that level.
Senator FISHER—The department is not aware of any stakeholder having recommended switch on, switch off?

Mr Maynard—That is correct.

Senator ABETZ—In relation to EBAs, would it be possible to have it as part of an enterprise bargaining agreement or other industrial instrument that you will or will not apply for the switch-off mechanism to be activated?

Mr Cully—In our view, no.


Senator ABETZ—After my convoluted question, I have forgotten how I phrased it— EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 62 Senate Monday, 31 August 2009 Mr Cully—In our view, no, you could not have a clause in an agreement that said you will or will not make an application to have the power switched.
Senator ABETZ—That would be a disallowable— Mr Cully—We consider that it would not be a matter that pertains to the employment relationship and therefore not a permitted matter to be in the agreement.

Senator ABETZ—So being a disallowable matter in the legislation has not specifically been ruled out —is that right?

Mr Cully—It is not covered at the moment.

Senator ABETZ—At the moment?

Does that suggest that it might be very shortly?

Mr Cully—No, it was a poor choice of words on my behalf.
Senator ABETZ—That is why I wanted to clarify it rather than— Mr Maynard—If I could interrupt for a moment.

Even if that matter were included in an EBA, I would remind you that the independent assessor would be obliged to take account of interested persons’ views when considering whether or not to turn the availability of the coercive powers off.

The views of all interested persons would need to be taken into account.
The fact that one party, one EBA, should have such a clause allowable would not bind other parties where the other interested persons would include the clients who are funding the project, the employer associations and the director.

Consequently, it would not be a determinative factor.

Senator ABETZ—It is an interesting explanation, but I wonder why it was given if it is not allowable ‘full stop’.

Mr Maynard—In order to inform the committee.


Senator ABETZ—Are you countenancing the possibility that it is allowable?

Mr Maynard—No.

You were suggesting that the matter had not been specifically disallowed or determined through Fair Work Australia.
I was saying even if the technical capacity existed for it to be included that would not be a determinative factor, as other interested persons’ views would also need to be taken into account by the independent assessor when considering whether or not to turn the availability of the coercive powers off.
Senator ABETZ—Yes, but it would be fair to say that the two parties that might have the most to say about these matters and would want to be heard by the independent assessor would in fact be the employer and the employee and it would be hardly likely, necessarily, that the person funding the construction of a particular project would be aware of the EBA.
Mr Maynard—It very much depends whether you are talking about an EBA of a subcontractor who makes a minimal contribution to the project or the major contractor who has charge of running the project.

Senator ABETZ—Why are we so certain that it is not allowable?

Is it your interpretation, Mr Cully, of what is allowable in these types of industrial instruments?

Why wouldn’t it be considered to be an industrial matter?
Mr Cully—To be included in an agreement, a term has to be a matter pertaining to the employment relationship.

We do not consider that such a clause would be a term that pertains to the employment relationship.

Senator CASH—Could it not be stated that it relates to the relationship between the union and employer and on that basis it would be allowable?

Mr Cully—No.

The explanation I gave of matters pertaining—you are correct—was the narrow one.
There is a slightly broader matter pertaining to the employer and a union, but, equally, we consider it does not pertain to that relationship either.

Senator CASH—On what basis do you not consider it to pertain to the relationship?

Mr Cully—Our interpretation is that it would not be a matter pertaining to either of those relationships.

CHAIR—There is significant case law around these matters, isn’t there?
You are not just guessing that it will not; you actually know based on historical cases that have been argued over many years.

Mr Cully—It is a matter that we have considered in detail.

We are certainly aware of the argument that has been put forward by the MBA.

We have looked at it; I am not just making it up on the spot.
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 63 Senator ABETZ—But there is no case law in relation to switching off provisions in this legislation being included in the EBA, is there?

Mr Cully—It is unlikely considering the switch-off powers have not come into effect.

Senator ABETZ—Exactly.

Has the minister made any public statement in relation to that?

Mr Cully—In relation to whether or not it would be a matter pertaining?

Senator ABETZ—Yes.
Senator ABETZ—Yes.

Mr Cully—No.

Senator ABETZ—It would potentially be helpful if that could be specifically ruled out by way of an addition to the explanatory memorandum.

Mr Cully—That is certainly something we could consider.

Senator ABETZ—I will leave it with you.

Has the department made any assessment of the culture in the building and construction sector in recent times in comparison to what it was prior to the BCII legislation?

Mr Maynard—No, we have not.


Senator ABETZ—You have no opinion to express?

Does the department accept the findings of the Cole royal commission as being factually based?

Mr Maynard—The royal commission came down with a series of findings and the department, as all public servants do, serves the government of the day and has implemented the recommendations arising that the government chose to take forward.

Senator ABETZ—I suppose this question potentially goes to advice to government.
In the findings of the royal commission was there nothing about that which led the department to have views that may have been contrary to the findings?

Mr Maynard—I am not sure I can answer that question, for two reasons, one of which is that it would be advice to government.

Senator ABETZ—I accept that, so you do not have to bother with the second reason!

Mr Maynard—Thank you very much!


Senator FISHER—Mr Maynard, thank you for your description about the extent to which the switch-on and switch-off provisions will apply or not.

Notwithstanding that, given that in rudimentary terms if you are good the coercive powers get switched off, what work can those provisions possibly have to do?
Mr Maynard—The Deputy Prime Minister, as part of her second reading speech, spoke about the need for continued cultural change in some pockets of the industry and the capacity for those employers, employees and unions operating in the majority of the industry to demonstrate that by having the powers turned off.

That is one aspect that the government believes would aid cultural change.

Senator FISHER—How?

On what basis?

Mr Maynard—By the capacity to demonstrate that there is no need for them.
Senator FISHER—If there is no need to have them what is the problem with having them?

If they are not needed to do any good, then maybe they are doing some ill. What is the ill they are doing in a workplace that might be able to get rid of them?

Mr Maynard—I do not accept the premise of the question.

Senator FISHER—Then go back to why, in a workplace that can demonstrate it does not need those powers, there is the reason for negating them by switching them off?
Mr Maynard—I think the Australian Bureau of Statistics identified most recently, earlier this year or late last year, 980,000 workers in the building and construction industry.

As has been heard from a number of witnesses today, there are pockets of unlawfulness, both employer and employee and union, and there have been some concerns raised about the industry as a whole being tarred with the brush of a few rogue, lawless elements.
The capacity for projects to be able to have the powers switched off and demonstrate that they are not amongst the lawless elements is thought to be a positive reward for cultural change.

Senator FISHER—So for a site where there has been cultural change what damage would be there from leaving the powers switched on?

On what empirical basis can you claim that there will be such damage?

So what damage and on what basis would you say so?


EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 64 Senate Monday, 31 August 2009 Mr Maynard—I have already questioned the premise of the question to suggest that retaining them is causing damage.

Senator FISHER—I am using your testimony, Mr Maynard, that this is necessary for those sites that can demonstrate cultural improvement.

Mr Maynard—It is not necessary.

It is felt by some elements of the industry to be desirable.
Therefore it is being facilitated by this bill.

Senator FISHER—So if it feels good do it.

Senator ABETZ—Can you tell us which elements of the industry?

Mr Maynard—A number of witnesses today have spoken about the desirability of turning off the coercive powers.

Senator ABETZ—Of the sector, not of the industry?

Mr Maynard—Would you define the difference?


Senator ABETZ—Well, we have heard evidence from the trade unions clearly, but I do not think I have heard it from the MBA, for example, or ACCI and AiG.

Senator FISHER—Mr Noonan spoke about the time that will be taken by unions in debating switch-on or switch-off on site by site, for example.

That is hardly an overwhelming endorsement of the efficacy of the ability to switch on or switch off.

Mr Maynard—I am not sure of what is the question.


Senator FISHER—It is: is it?

Mr Maynard—Thank you, Senator.

Senator FISHER—All right.

I refer to the five-year sunset provision.

On what basis is it deemed appropriate to sunset it at the end of five years, as opposed to review it?

Mr Maynard—The bill contains the five-year sunset provision.
The explanatory memorandum contains the government’s intention to conduct a review prior to that time, to enable a decision as to whether or not further legislative change is required.

Senator FISHER—But why bother if the sun is going to set?

Why bother with a review as the sun is going to set?

The bill says so.
The bill says so.

Mr Maynard—Because of the commitment to ensure compliance with the law and because at this point in time Mr Wilcox recommends the continuation of the coercive powers, which the government agrees with.

The continuation would be subject to a continued need.

There will need to be a review and the government has signalled the intent to conduct a review.
Senator FISHER—And surely the end point of that review by saying the sun is going to set on any form of cop on the beat in five years time.

Mr Maynard—No.

My evidence to you was and is that a review would be conducted, as listed in the explanatory memorandum, in sufficient time to be able to make an informed decision as to whether legislative change would be required to continue the availability of coercive powers.

Senator FISHER—Does the bill say that?

If so at which clauses, Mr Maynard?


Mr Maynard—The bill contains the sunset provision.

The explanatory memorandum contains the intention to conduct a review—I think it is at paragraph 126 but I would be happy to be corrected—with the intention of informing the decision as to whether or not to remove the sunset provision.

Senator CASH—Mr Maynard, the evidence given by AiG in relation to the sunset clause is that the powers may or may not be needed up to five years.

Obviously, you accept that.


They say a review after five years is appropriate—and you would agree with that—but they then say that a provision which automatically removes the powers after five years, unless further legislation is passed by both houses of parliament, is not appropriate.

Can you clarify what is meant by that?

Mr Maynard—My interpretation of that, and it is just that as I do not know what they mean, is that they would prefer to see that no sunset clause be included in the legislation.
Senator CASH—So you are saying that there is no sunset clause as such and that a review has to be conducted firstly and that the result of the review may be that the powers are actually continued.

EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 65 Mr Maynard—No.

The sunset clause is there and it will have effect unless there is legislative reform to remove it.
It is hoped that the culture in the industry will continue to improve and that there will be no need for the coercive powers after a period of five years.

The government has signalled its intent to undertake a review which would inform such a decision and would inform as to the potential need to bring back legislation to parliament to remove the sunset clause.

Senator CASH—Can I also clarify this with you.


It has been put to me that the Deputy Prime Minister has issued a directive that companies do not need to be accredited by the Federal Safety Commissioner to get stimulus funded work.

Mr Cully—That is correct.

Senator CASH—So it is correct?

Mr Cully—The accreditation scheme is largely covered under regulations.

There is capacity to make regulations to exclude certain types of building work.
There was a regulation made—and I cannot recall the exact date; it was a few months ago—which did exclude money that would form part of the economic stimulus package.

Senator CASH—That is all, thank you, Chair.

CHAIR—Thank you, Gentlemen, for your submission and for your presentation to the committee today.
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 66 Senate Monday, 31 August 2009 [4.34 pm] DALGLEISH, Mr Ross, Deputy Commissioner, Legal, Office of the Australian Building and Construction Commissioner JOHNS, Mr Leigh Andrew Hyland, Deputy Commissioner, Operations, Office of the Australian Building and Construction Commissioner LLOYD, the Hon.
John, Commissioner, Office of the Australian Building and Construction Commissioner CHAIR—I welcome to the inquiry our next witnesses, from the office of the Building and Construction Commissioner.

I do not believe you have made a submission to the inquiry.

Mr Lloyd—No.

CHAIR—All right, then.

I will just hand it over to you to make some opening remarks to the committee, to be followed by some questions.

Mr Lloyd—I will make a brief opening comment.


The ABCC has carried out its functions effectively and professionally.

It has fulfilled the main object of the Building and Construction Industry Improvement Act 2005.

It is unacceptable that persons should go to work fearful that they will encounter unlawful conduct; that they will be abused, coerced or threatened; or that those who engage in unlawful conduct will seem to be above the law and not held accountable.
This is not the way that Australians should work and live.

However, it has often been the experience of those working in the building and construction industry.

The economic impact of industrial action in the building and construction industry can be serious, as in a number of other industries.

This industry is set apart because, prior to the ABCC and associated reforms, the level of disputation was consistently very high and excessively above the national average.
The industry’s workplace relations conduct has been subject to numerous royal commissions, inquiries, reviews, codes and special regulations and oversight by specific bodies.

This has occurred at both the national and the state and territory levels.

The ABCC is the last of these initiatives.

The Fair Work Building Industry Inspectorate is to be the next initiative.

The bill creates an inspectorate that will not be the same as the ABCC.
On my count, the bill introduces 28 new procedural and supervisory requirements.

Also, the objects of the act are to be changed.

The workplace relations conduct of the industry’s participants has improved during the tenure of the ABCC.

More projects are now completed on time and within budget.

Industrial disruption of projects is lessened.

The allowance made for industrial risk when calculating cost of a project has been reduced.

Industry productivity and efficiency have improved.
The ABCC has been an active and resolute regulator.

It has conducted 646 investigations, commenced 61 court proceedings and undertaken 118 interventions and tribunal and court cases.

It is crucial that the industry knows that the ABCC is out and about and that it will commence court proceedings without fear or favour.

The ABCC powers to obtain information through compulsion have been invaluable.

It is often not appreciated that the powers are never used against the target of an investigation.
This is because the evidence taken at an examination cannot be used in later proceedings against the witness.

Another point often ignored is that every witness has a right to legal representation.

The powers have been used on 174 occasions.

Their use has materially assisted the workplace relations reform process.

They have played an important role in breaking down the code of silence and the intimidation of witnesses to unlawful conduct.
The influence of the powers extends beyond simply counting the number of times they have been used.

The very existence of the powers has altered the behaviour of many industry participants.

ABCC inspectors are still subjected to abuse when going about their work on building and construction sites.

On some recent occasions, their treatment has involved threats and assaults.

It is disturbing that some industry participants are emboldened to subject ABCC personnel to such attacks.
We have powers to respond and refer such matters to the police.

However, the real concern is how small- to medium-sized contractors respond.

The attack against them is frequently associated with a threat to be banned from working in the industry, in an area or on a project.

I admire the courage of subcontractors who stand up for their rights.

The ABCC has improved the conduct of the industry.

However, the culture of the industry remains volatile.
Some have now decided not to engage in unlawful conduct and others are now more cautious about taking such a step.

However, still others are not even deterred by the knowledge that we will vigorously pursue unlawful conduct.

The ABCC currently has 32 proceedings underway, is undertaking 57 investigations and, EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 67 last financial year, conducted 61 compulsory interviews.
In 2010 the industry needs a well-resourced, powerful, accessible and resolute regulator.

Thank you.

CHAIR—Thanks, Mr Lloyd.

ACCI this morning said to us that, in their view, the genie was back in the bottle.

What that meant, without trying to verbal them, was that the genie of widespread unlawful conduct in the industry is effectively in the bottle at the moment.

They say that there are only now pockets of problems.

Do you think that is a fair assessment of the industry?
Mr Lloyd—The conduct has improved.

If they say the genie is back in the bottle, perhaps it is.

Certainly unlawful industrial action is down at historically the lowest levels ever.

But there are still instances of unlawful conduct.

On a national basis we have investigations currently underway in almost every state and territory.

We have court cases in almost every state and territory.

It has improved, but the culture is still of concern, as I said.

It is not settled.
It is not settled.

Instances of unlawful conduct still occur.

CHAIR—It was also put to us by a number of witnesses that it is a very large industry and in any industry of that size there are always going to be what might be considered rogue elements—I am not sure whether they were the exact words used by people—whether it be employees or employers.

I am trying to get a feel for the extent of the problem.
One of the concerns that has been raised—I think quite rightly—is that we do not want to be in a position where the industry is talked down unnecessarily if it is simply pockets of problems that need to be addressed.

The minister referred to some of these things in the second reading speech.

It should be described as having pockets of problems, rather than depicting the whole of the industry as unlawful.

That will of course become problematic for investment and for the conduct of the industry as a whole.
Could you give me a more definitive picture of the extent of what you see as the problem.

You say there are still problems with unlawfulness, but, given the size of the industry, I am trying to get some perspective on or some context around what you see as the problem.

Mr Lloyd—We have said—and data reflects this—that two states are worse than others.

Victoria is clearly the state with the worst record of conduct.
Normally about 50 per cent of our investigations and 50 per cent of our court cases come from Victoria.

So it leads the table on almost every measure that we have.

Western Australia is overrepresented for its size in the national coverage of the industry.

I am reluctant to say that the culture has improved across the industry.

It is always hard to make these judgments.


I have run this sort of thing for some time, in previous jobs as well, and I have found that the mere presence of a regulator does change the conduct, as I mentioned in my opening statement.

There is a judgment to the extent that if you relax the current arrangements or you take away the regulator then you might find that it bounces back quickly to what was unacceptable conduct in the past.
CHAIR—You have heard some of the discussion today already about pursuing underpayments and breaches of awards.

If I recall correctly, we had a lengthy discussion about this over a number of estimates proceedings.

You do recall—with a smile!

My recollection is that you— Senator JACINTA COLLINS—That was a broad grin.

Senator ABETZ—It is amazing what the chair is allowed to put on the record, but I am not.

Senator BILYK—You’re not denying that smile there, are you, Senator Abetz?
CHAIR—I was referring to the acknowledgement of the fact— Senator ABETZ—It is just indicative of how trade unionists run these— CHAIR—It might be indicative of the bias against them.

However, let us move on.

You entered into either a memorandum of understanding or a memorandum of agreement in relation to having the Workplace Ombudsman do those things.

The Ombudsman no longer actually exists in the form that it was.
I am wondering what the status of that arrangement is now, given that the BCII Act gives you the remit to do all of those things in the building industry?

Mr Lloyd—The Workplace Ombudsman and I exchanged a letter.

We made a conscious decision not to enter into a formal memorandum of understanding.

We did not need to do that as we were two agencies within the portfolio.

We exchanged a letter that we would refer matters back and forth basically.

That has worked well.


There has been no new letter signed, but given the normal machinery of government arrangements, the arrangements continue, so we do refer matters to the Fair Work Ombudsman as they arise.

CHAIR—You say that that letter carries on in its powers due to the machinery of government change?

Mr Lloyd—You do not necessarily need a letter, but we felt it was worth while to formalise it to set up some contacts and ways of handling matters.
But, particularly as we are within the portfolio, we do not need a EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 68 Senate Monday, 31 August 2009 formal exchange to continue with this arrangement.

The act also has one of the functions that we do refer matters to other agencies, which we do beyond the Ombudsman of course.

We do not have MOUs with most of those agencies— CHAIR—But they are matters outside your remit under the legislation of course.
We are talking about the matters that are in your remit under the legislation.

Mr Lloyd—Yes.

CHAIR—So have you taken any steps to formalise those arrangements since 1 July?

Mr Lloyd—No.

CHAIR—But you are confident that those arrangements are still in place?

Mr Lloyd—Yes.

Senator ABETZ—So you are still referring?

Mr Lloyd—Yes.

Senator BILYK—You talked about the number of investigations and court proceedings and you said that there were 118 interventions and 61 compulsory interviews.
Mr Lloyd—Yes, in the last financial year.

Senator BILYK—Can you tell me out of those four numbers how many involved employees and how many involved employers?

Mr Lloyd—I do not have that statistic here with us today, but we can give it to you obviously.

Senator BILYK—Could you give me a ballpark figure, and we will accept that it is a ballpark figure.

I would like you to take that question on notice.

Senator ABETZ—I think ACCI in their submission— Senator BILYK—Excuse me.

It is my turn.
It is my turn.

Senator ABETZ—I am just trying to assist.

Senator BILYK—I was very quiet for you.

Senator ABETZ—Sorry.

We have the numbers before us, but if you do not want them referred to, that is fine.

Mr Lloyd—We often give these numbers.

I know that when you look at the statistics normally about 25 per cent of the court cases involve an employer party.

These figures vary as the court cases are updated, but that is roughly the figure.
For the interventions it is not really a matter where you would say.

We intervene in a public interest type role to ensure that the court and the parties are aware of their obligations under the various acts applying, so it does not really apply there.

Mr Dalgleish—Out of the examinations, in the last financial year, 2008-09, there were 39 for employees, one for union officials or delegates, and 20 for management.

Senator BILYK—There is one number missing.

Mr Dalgleish—Yes.
Mr Dalgleish—Yes.

There will be a discrepancy between the notices issued and the examinations held.

Senator BILYK—What about for the 646 investigations?

Mr Lloyd—We do not have that number with us at the moment.

Senator BILYK—Could you take that on notice, because I am interested in knowing that?

Senator JACINTA COLLINS—We have heard from even some of the employer organisations discussion of the principle of one rule for all.
In light of the earlier discussion we had about the effect the mere existence of a regulator has on behaviour, I am interested in your view, Mr Lloyd, of when you will regard yourself as having done yourself out of a job.

When will there no longer be a need, or do not support this one rule for all principle?

Mr Lloyd—If the industry had of had a history of being lawful and not being different to other industries in the standard of its conduct then you would not have needed a special regulator.
There will be a number of indicators.

One thing I am often told is that smaller contractors—and I started off in the housing sector—have often been reluctant to grow their firms to operate in the more commercial sector because of the reputation of the industry for intimidation, standover tactics and that sort of thing.
If it becomes apparent that there is more EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 69 confidence of people to grow and go into the commercial side of the industry with a greater degree of confidence, that would be one measure perhaps.

Of course, if the number of our investigations and complaints decreased significantly, that would be another indicator.
Senator JACINTA COLLINS—We have by virtue of the AiG submission your letter to the Deputy Prime Minister to refer to your views about in a sense Wilcox and in part this legislation.

Is there anything further that you would like to raise on that?

Mr Lloyd—No.

Senator SIEWERT—I want to go to section 14 of the current act that requires the ABCC to publish details relating to the recovery of unpaid entitlements.

Have your annual reports covered this?

Mr Lloyd—Yes, they have.


Senator SIEWERT—Can you tell me how many cases you have covered?

Mr Lloyd—Which section are you referring to?

Senator ABETZ—Section 14 enumerates a number of matters.

Mr Lloyd—Yes, that is right; it does.

Senator SIEWERT—I am particularly interested in following up on unpaid entitlements and the recovery of them.

Mr Lloyd—There are a small number of cases that have been referred to in past annual reports.
I cannot recall off the top of my head the detail, but they are mentioned there.

Whatever we have done in that area is mentioned.

Senator SIEWERT—If you could take on notice the number that have been reported on, that would be very useful.

Mr Lloyd—Yes, certainly.

Senator SIEWERT—Also, it was raised a little earlier in evidence—and I am pretty certain you were here at the time—about your budget for last year.

That was $35 million; is that correct?

Mr Lloyd—In that order, yes.


Senator SIEWERT—Of which you spent $20 million?

Mr Lloyd—No.

In the financial year that ended just recently and the in year before, we came in with a surplus of about $5 mill Senator SIEWERT—A surplus?

Mr Lloyd—Yes, so we have not spent $5 million of our budget in the last two financial years.

Senator SIEWERT—This issue was raised earlier in relation to referral of matters to the Fair Work Ombudsman and prior to that the Workplace Ombudsman.
Why do you refer matters to them rather than carrying out the work yourselves when you have a surplus, when you have money in the kitty, to do it?

Mr Lloyd—The main reason is that they have the expertise.

One of the core roles of the Workplace Ombudsman, now the Fair Work Ombudsman, is to investigate unpaid entitlements.

They have the expertise and they do it on a regular basis.

Also, their contact lines have been very credible and recognised, so complaints tend to go to them and not to us.
Frankly, we get very few complaints about unpaid entitlements coming to us from unions or employees.

Given that and given their expertise it was just considered to be the most efficient way to use Commonwealth resources to have them do it rather than us replicate with our staff the skills which they have been discharging quite effectively.

Senator SIEWERT—There are two points I want to follow up.
One point is that the department—and you were here when the department gave their evidence—were saying that they did not think it was necessary to have special expertise to carry out the separate functions.

They felt that one body could carry out the different functions.

Do you disagree with the department?

Mr Lloyd—I have a view which I just expressed.

I am charged, as is the Ombudsman, with using government moneys to best effect.
It seems to me that that was a very efficient way in which to allocate our resources.

We do have in our normal investigations skills which are a bit different to chasing up employee entitlements.

But, as I say, seeing they did it well, we do not get many complaints, they have a very good and I think effective complaint systems, there are some pretty compelling reasons why they should do it and not us.
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 70 Senate Monday, 31 August 2009 Senator SIEWERT—Is following up complaints all the work that you do?

Mr Lloyd—No, certainly not.

Education, information and advice are very important.

I think if you have strong powers it is a quid pro quo responsibility to make sure you devote a lot of time and energy to informing and educating the industry.
Senator SIEWERT—Are all the issues that you follow up response to complaints or do you initiate investigations yourself?

Mr Lloyd—Most of the investigations are from complaints.

Senator SIEWERT—What percentage would that be?

Mr Lloyd—I would have to take that on notice.

Senator SIEWERT—If you could, that would be appreciated.

Mr Lloyd—It would be the predominant number.


We may come across a report in the media, for example, or you might be on a site investigating a matter and it might be apparent from that investigation that there is another potential contravention, but the vast majority of matters arise from a complaint.

Senator SIEWERT—Okay.

If you could take that on notice it would be appreciated.

Mr Lloyd—Yes, certainly.

Senator SIEWERT—Thank you.

Senator ABETZ—Thank you, Mr Lloyd.


Any underpayment of employee entitlements is treated seriously by your organisation— Mr Lloyd—Certainly.

Senator ABETZ—and that is why you refer it—previously to the Workplace Ombudsman but now to the Fair Work Ombudsman?

Mr Lloyd—Yes.
Mr Lloyd—Yes.

Senator ABETZ—There is no suggestion that you have any ideological difficulty with enforcing the law in that regard; it is just that you believe that the Fair Work Ombudsman—if I can use the term Ombudsman to cover both manifestations—was the best way for employees to get their industrial justice?

Mr Lloyd—Yes, certainly.

Senator ABETZ—Thank you for that.

You have indicated to us some of the abuse, threats and assaults that your officers have to face on work sites.
I suppose the opportunity for that to occur may well be enhanced if they had to wear identifying uniforms on work sites?

Mr Lloyd—Yes, that would probably increase the risk.

When they go on now they have to produce a card.

Senator ABETZ—Yes, but somebody submitted to us that that was not enough and that it would be very helpful for these people to wear a uniform.

I was just interested in your view as to what might occur if these people had to wear a uniform on work sites.
Mr Lloyd—It works well at the moment.

I would not contemplate recommending—I don’t intend to, certainly; I think it would be a bad step—the wearing of uniforms.

Senator ABETZ—Thank you for that.

I think you have already indicated that the culture in the building and construction sector is the worst in Victoria.

Is that right?

Mr Lloyd—That is right.

Senator ABETZ—And second in the league tables would be Western Australia, would it?

Mr Lloyd—Yes, Western Australia is overrepresented.
I used to live in Western Australia and according to national data it is roughly 10 per cent of national figures.

It is overrepresented compared to Queensland and usually New South Wales.

Senator ABETZ—There was a suggestion by the Commonwealth Building Industry Taskforce that a survey conducted on a number of clients who withdrew their complaint found that 52 per cent had done so for fear of the ramifications they may face should they pursue the matter.
Is the issue of reprisals still alive and well in the building and construction sector in relation to people not wanting to make or pursue complaints?

EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 71 Mr Dalgleish—It is, and I regularly see it in the conduct of examinations.

We are asked to exercise our compulsory powers, because if somebody is seen to be willingly assisting us then they will suffer the commercial consequences.
Senator ABETZ—If there were just a monetary penalty in relation to that, as opposed to a potential imprisonment penalty, do you think that would weaken the coercive powers at all?

Mr Dalgleish—I think they are two different things.

The criminal penalty only relates to people who fail to attend a compulsory examination, whereas penalties for coercion and breach of the other workplace relations laws are just civil penalties, not criminal.

Senator ABETZ—Thank you for clarifying that for me.
Does the ABCC pursue breach of industrial instruments and industrial awards in its investigations?

Mr Lloyd—As part of our functions, yes, because if a breach of an agreement is non-payment of employee entitlement then we can refer that to the Workplace Ombudsman.

But there are instances, particularly of failure to adhere to a dispute resolution procedure in an agreement, and on occasions that has been a matter which we have commenced proceedings on.
Mr Dalgleish—For example, in the Ravensthorpe proceedings there were five industrial agreements that were only three weeks old and they each had a dispute resolution procedure included in the industrial agreement, yet there was industrial action.

We stopped the site, with a 48-hour homer.

So, in addition to saying that that was unlawful industrial action, we also said that it was in breach of the dispute procedures in the agreements.
Senator ABETZ—How alive is the issue of freedom of association on workplace sites and on how many occasions do you have breaches just relating to the issue of freedom of association?

Mr Lloyd—It is certainly still a live issue on a number of sites and comes up in a number of our investigations.

We might have some data on the actual proportion for you.

Mr Dalgleish—In 2008-09 there were 11 freedom of association cases out of 48, so just under a quarter.
Senator ABETZ—If I am correct, the Parliamentary Library put together a paper for us in the 12 months, from 1 June 2007 to 31 July 2008 which, looking at that, would be more than 12 months looking at that.

They tell us the majority of breaches related to: unlawful or unprotected industrial action, 199; right of entry, 156; coercion, 139; and freedom of association, 114.

Are those figures familiar to you?

Mr Dalgleish—Are they investigations or proceedings?
Senator ABETZ—It says, ‘Pursue 225 investigations into a suspected 812 contraventions of relevant workplace laws.’ That is footnoted as, ‘ABCC: a year at a glance—industry update July 2008.’ Mr Lloyd—Those figures sound right.

They relate to investigations.

Senator ABETZ—So back to the ‘freedom of association investigations—114’.

What does freedom of association investigations usually mean?

Mr Dalgleish—No ticket, no start.


Senator ABETZ—So the issue of no ticket, no start is still unfortunately alive and well on building and construction work sites although it is against the law?

Mr Lloyd—It still occurs, yes.

Senator ABETZ—Thank you for that.

I think you were in the room when Mr Noonan made his allegation about the conduct of one of your officers in interviewing somebody from a non-English-Speaking background.
Has the commission received a complaint in relation to that or a similar matter?

Did that matter sound familiar to you?

Mr Lloyd—The allegation, I think, sounds familiar.

We have not had any complaint of such a matter.

I think when a similar allegation was made we conducted an internal check as to whether anybody knew about it—that is, the people who conducted the hearings.

There was no evidence that such a thing took place.
It would be a serious breach of our ethical standards and our Australian Public Service Code of Conduct standards to engage in such conduct.

Senator ABETZ—But has the trade union written or informed you that on a particular date a particular officer at a particular address allegedly engaged in the sort of behaviour that Mr Noonan advised us of?

Mr Lloyd—I have not received such a letter.


EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE EEWR 72 Senate Monday, 31 August 2009 Senator ABETZ—If the commission had received such a letter, one assumes it would have been brought to your attention, Mr Lloyd.

Mr Lloyd—Yes.

We would have commenced a formal investigation.

You have to do that.

Senator ABETZ—If that complaint had come to you, you would have treated it very seriously?

Mr Lloyd—My word.
Mr Lloyd—My word.

Senator ABETZ—I am pleased to hear that, being somebody from a non-English-Speaking background myself.

If anybody in the Public Service or public sector were to behave in such a manner, that would be a matter of great concern to me.

I am pleased that the ABCC, if it were actually given the details of the allegation, would follow that up seriously.
Mr Lloyd—All of our publications mention assistance to persons of non-English-Speaking background and interpretation services on complaints and extended to any compulsory hearing.

That is fundamental to how we go about our business.

Senator ABETZ—Thank you.

Senator FISHER—Mr Lloyd, what consultations were had with you in advance of the Deputy Prime Minister’s ill-fated attempt to arguably curtail your coercive powers with effect from 3 August by dint of her subsequently disallowed ministerial direction?
Mr Lloyd—There were none.

Senator FISHER—Thank you.

Have there been any consultations since in that respect?

Mr Lloyd—About the coercive powers, no.

Senator FISHER—You have talked about a culture of lawlessness and intimidation and you have talked about the extent to which some of that behaviour might have impacted upon the commission’s officers.

What about you personally, Mr Lloyd?

Have you enjoyed any of that yourself in your professional capacity?

Mr Lloyd—Yes, I have.


It happened in my lunch hour.

I was walking near my office and I was confronted by a union organiser.

I was abused, threatened and spat at on the St Kilda Road.

I happened to exit a building next door to a building site.

I referred the matter to the police.

Senator FISHER—What do you say of that incident in the context of the bill?

Senator FISHER—What do you say of that incident in the context of the bill?

Mr Lloyd—I should not say too much about it.


I have referred it and it is subject to a police investigation, so I would rather not say anything about it.

I have great concern, of course, about my staff who have to go onto a building site on a regular basis.

It is not pleasant to have in the back of your mind that you may encounter that sort of thing.

We work in a robust industry, but when it crosses a line I will not tolerate it.
We will refer it to the police and it is then up to them to investigate it.

We take our OHS responsibilities to our staff very seriously and we train them quite thoroughly in handling these sorts of matters.

Also, they are under instruction to not in any way incite or intimidate a person and to withdraw when they are confronted by such conduct.

Senator FISHER—To what extent is on site, off site relevant?

Mr Lloyd—I beg your pardon?


Senator FISHER—I presume from what you say that the incident occurred off site.

Mr Lloyd—Yes, it was in my lunch hour.

I was not going about my official duties in any way.

I was just walking out of a newsagent, out of a building which had a newsagent, and was confronted by it.

Senator FISHER—Thank you.

Senator CASH—I have a question on the use of coercive powers, Mr Dalgleish, and the ‘willing witness’ argument.
There is evidence from the Combined Construction Unions that the ABCC said that one-third of all compulsory interviews were not in fact compulsory but fell into this category where witnesses wanted to be seen to be providing information on an involuntary basis because they were fearful of the consequences of being seen to be cooperating with the investigation.

They then go on to say: The ABCC provided no evidence that the assertion that such fear exists or even if it does, that it is well-founded.
And they strongly dispute the claims that have been made.

Can you elaborate on why you say this fear does exist and it is well-founded, other than by making the mere assertion?

EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE Monday, 31 August 2009 Senate EEWR 73 Mr Dalgleish—Certainly.

We get complaints sometimes that will come in from a head contractor and the complainant will say: ‘We don’t want to be seen to be co-operating with the ABCC.
Here’s a raft of witnesses for compulsory examination.

Here are the various documents that have been prepared.’ We obtain those under compulsory power and then we will conduct a hearing.

If I were to identify those people who have requested it, then the point of them gaining the advantage of saying, ‘Those awful people at the ABCC made me do it; I did not want to do it,’ would be lost and commercially they would suffer the same consequences as if they gave voluntary statements or affidavits.
Senator ABETZ—In relation to the definition of a building site, we have been confronted with a suggested amendment not to deal with off-site building for, let us say, concrete panels or joinery type activities.

I was just wondering if you have any experience to draw on or suggestions that you would make in relation to what has occurred in the industry on off-site areas.

Mr Lloyd—I covered that in my letter to the minister where I suggested that that was a useful coverage and should be retained.
Mr Dalgleish—Apart from the concrete tilt panels, which are a regular occurrence, you have things like the manufacture of concrete girders, which are huge things which will structurally hold up a bridge.

Obviously you do not manufacture those on site.

The construction of these concrete girders will involve over 100 workers who look and behave every bit like building workers but they are technically not on site.
Senator ABETZ—And they are often covered by the same unions that are, if you like, on site— Mr Dalgleish—Certainly.

Senator ABETZ—as off site.

So you have got the same union that might have the same industrial aspirations, to put it in a neutral manner.

Mr Dalgleish—It is just that physically it is more convenient to manufacture away from the gully that you are building a bridge over.
Senator ABETZ—Of course the behaviour there, lets say, with the frustrating of the production of the girder and thus the delivery can hold up the totality of the construction of that bridge.

Mr Dalgleish—Certainly.

The actual on-site construction is just the installation of the girder.

The strength of the girder and all those critical things has already been determined.

CHAIR—Thank you for your presentation to the committee today.
Committee adjourned at 5.15 pm EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS LEGISLATION COMMITTEE