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Issue #1560      15 August 2012

Inquiry into construction company collapses

The Construction Forestry Mining and Energy Union (CFMEU) has branded the announcement of an inquiry into construction company collapses in NSW a victory for the union and its members. It is expected Finance Minister Greg Pearce will announce the inquiry, to be headed by Sydney barrister Bruce Collins, which will look at legal and policy reforms to minimise the effect of the insolvencies on jobs and major projects in the state.

CFMEU NSW state president Rita Mallia said the CFMEU has been calling for the inquiry since February when the first of a series of major builders, Kell & Rigby, went into liquidation. In the wake of its collapse it was revealed more than $35 million was owed to 500 businesses.

In almost a domino effect the collapse of Kell & Rigby was followed by the loss of Reed Construction and the St Hilliers Group. In March the CFMEU launched a campaign to secure the 10,000 signatures needed to force a debate of the issue around security of payments to contractors on the floor of Parliament.

“The flow-on effect of these collapses saw thousands of workers out of jobs, and many sub-contractors and suppliers left on the brink of collapse themselves, as bills of more than $100,000 were left unpaid,” said Mallia.

“Critically these collapses threatened years of holiday pay, superannuation and other entitlements accrued by building workers with little hope of recovery and ever-increasing reliance on the taxpayer funded GEERS (General Employee Entitlements and Redundancy Scheme).”

Mallia said the construction union is ready to work with Mr Collins to ensure the inquiry results in the changes needed to protect sub-contractors and workers.

“We are delighted that the O’Farrell government has finally seen the light and has responded to our push for legislative changes to protect sub-contractors and workers. The race to the bottom in contracting and corporate practices must be abated and decency restored to the industry.

“We need a system that guarantees principal contractors and developers cannot touch money that is owed to sub-contractors, suppliers and workers.

“We are hopeful this is the first step to achieving that.”  

Next article – Green light for Victoria’s biggest education strike

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