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Issue #1728      April 27, 2016

The Australian Building and Construction Commission Mark II

Gestapo industrial relations laws

Last week the Senate rejected the Australian Building and Construction Commission (ABCC) legislation for a second time as hoped for by the Turnbull government. The government is using it to justify a double dissolution of Parliament and an election campaign centred on “union corruption” and Labor’s links with the trade union movement. Like its predecessor introduced by the Howard Coalition government, the ABCC discriminates against workers in the building and construction industry by applying a different and harsher set of laws to workers and their unions not applied in any other industry.


ABCC Australian Building and Construction Commission
ABCC Mark II Abbott/Turnbull version of the ABCC
BIIP Building Industry (Improving Productivity) Bill 2013
CFMEU Construction Forestry Mining and Energy Union
EBA Enterprise Bargaining Agreement
FWBC Fair Work Building and Construction


Photo: CFMEU photos library

In fact the Building Industry (Improving Productivity) Bill 2013 (BIIP) is even harsher than Howard’s 2005 version. It increases penalties for workers and unions, widens its reach and seeks to implement a Building Code which would take away rights workers have to negotiate certain items in enterprise bargaining agreements with their employer.

Some one million workers would be affected because the new version of the Bill will extend the ABCC’s reach to all workers that supply, transport building goods directly to building sites (including resource platforms) or prefabricate manufactured goods on- or off-site. This includes ships travelling to and from Australian ports.

Corruption myth

The Turnbull government claims that the ABCC is necessary to deal with alleged criminal conduct by building industry workers and their trade unions. It is manifestly untrue and completely misleading to say that a new ABCC will deal with criminal matters.

Knowing full well that the ABCC cannot deal with criminal matters, Malcolm Turnbull used it as his excuse to prorogue Parliament and in doing so mislead the Governor-General, saying, “the Government regards this legislation as of great importance for promoting jobs and growth, improving productivity and also promoting workplace safety through taking strong measures to deal with widespread and systematic criminality in the building and construction industry.”

Howard’s original ABCC and its successor, Labor’s Fair Work Building and Construction (FWBC), have never had any role in investigating breaches of the criminal law. Both bodies dealt with possible industrial law contraventions, which are and always have been civil, not criminal matters. This Bill would not change that situation at all.

Industrial action outlawed

Under the Fair Work Act, the only legal industrial action is “protected” action. This is action taken following the expiry of an EBA and during the period when a new EBA is being negotiated. There are also requirements for a ballot of those covered by the EBA and the employer being given advance notice of any action.

ABCC Mark II narrows the definition of right of “protected action” for building and construction workers. In addition to the provisions of the Fair Work Act which applies to all other workers, it introduces the concept of “protected persons”.

“Protected persons” are:

  • the trade union or officer of the union (bargaining representative) that is negotiating the proposed agreement
  • members of the union who are employed by the company and will be covered by the EBA
  • an employee who is a bargaining representative for the proposed EBA.

Action will not be “protected” industrial action if it is engaged in concert with one or more non-protected persons. It will be unlawful.

This seriously weakens the position of a union where there is not 100 percent membership. All an employer needs to do is plant a stooge who does not join the union and stops work with the union members for the union and members taking the action to cop the hefty fines.

“No ticket, no start” is outlawed. Attempts to negotiate uniform agreements across a site are outlawed, drawing similar penalties.

One of the aims is intimidation, to frighten off workers who might join a trade union, or take industrial action. Another is to bankrupt the unions.

Stiff penalties

Under the BIIP Bill unlawful industrial action and a number of other breaches of the bill carry Grade A penalties. These are a maximum of $36,000 for individuals and $180,000 for trade unions. (Grade A penalty is 1,000 penalty units, Grade B is 100 units and one penalty unit is currently $180.)

At present, the penalties are the same for all workers as specified under the Fair Work Act – a maximum of $54,000 for trade unions and $10,200 to $10,800 for an individual.

Pickets unlawful

The BIIP Bill for the first time in industrial relations legislation outlaws picketing. If the motivation is for the purpose of supporting or advancing claims against the employer in respect of the employment of workers or the engagement of contractors or the objectives of a union, it is illegal.

The penalties are also Grade A – $36,000 fine for individuals and $180,000 for trade unions. This extends the legislation beyond the employer-employee relationship, beyond union solidarity actions to ordinary civilians who may wish to demonstrate their support.

A court is required to consider the mental state (motivation) of participants! It applies to anyone on that picket, not just unionists or other workers. In other words, it outlaws community pickets. The onus of proof is reversed. The person facing the court must prove that their motivation had nothing to do with a dispute or other union-related matters.

Coercive powers

The Bill reinstates the coercive investigatory powers of the ABCC under the original BCII Act but with a substantial increase in penalties. Where the ABC Commissioner is investigating a matter it has the power to require a person to give information, produce documents, attend an “examination” (interrogation session), be required to take an oath or affirmation and answer questions.

The questions could be as simple as who said what at a union meeting or who attended a meeting, took part in an action or supported a resolution. Answers to such questions might sound innocuous on the surface but such answers could be used against workers and union officials when an alleged breach of the Fair Work Act, the ABCC bill or Building Code is suspected or being investigated. Workers would not be able to have a lawyer of their choosing.

Failure to appear, to answer questions, take an oath or affirmation, or produce documents is considered to be a criminal offence – hindering Commonwealth officials under the Criminal Code – punishable by six months jail.

The ALP’s Act provides the option for a penalty in addition to or instead of the jail term. The Coalition’s does not. Jail is the only option.

There is no right to remain silent, no privilege against self-incrimination. In addition, workers may be expected to recall details of events two or more years later!

Labor removed the powers of the ABCC to investigate any suspected breach of the law when the dispute or other issue had been resolved. The new bill restores them.

ABCC Inspectors would have the power to enter workplaces, make inspections, interview people, and require them to produce records or contacts.

The Law Council of Australia (LCA) found the ABCC legislation includes “a number of features [that] are contrary to rule of law principles and traditional common law rights and privileges such as those relating to the burden of proof, the privilege against self-incrimination, the right to silence, freedom from retrospective laws and the delegation of law making power to the executive.”

Safety last

Agreements which include safe working hours are prohibited. This will lead to more deaths and injuries as well as higher rates of exploitation. The industry is already one of the most dangerous.

The right to take industrial action based on a reasonable concern about imminent risk to their health or safety differs from a similar provision in the Fair Work Act in that the bill reverses the onus of proof.

Fatality rates on major construction projects are seven to ten times higher than for all workers. Infrastructure construction had the highest fatality claim rate in Australia; 13.6 deaths per 100,000. In Queensland it is 14.7 deaths per 100,000.

One construction worker dies at work in Australia every 10 days and 37 are seriously injured at work every day.

Construction workers have the highest prevalence of non-payment of wages and entitlements compared with other workers and already work more average hours per week than in any other industry.

The provisions of the BIIP bill will only worsen the situation by removing limits on working hours.

Young male tradesmen have the highest rate of injury of any worker – 113.8 injuries per 1,000 workers. More tragically, 60 out of 100,000 workers aged 15-24 in the construction industry commit suicide every year.

During the period of WorkChoices and the ABCC under Howard, fatalities for all workers increased by more than 25 percent, while fatalities for construction workers almost doubled.

During the same Howard period, workplace fatalities in construction peaked at 48 deaths in 2006 and 51 deaths in 2007 per 100,000, making them the worst two years for deaths in construction in the last decade. (Work-related Traumatic Injury Fatalities Australia 2012, SafeWork Australia)

By contrast, following the replacement of the ABCC by Labor’s Fair Work Building and Construction (FWBC) in 2012, some 30 deaths were reported, the lowest number of deaths in the past ten years (Source as above).

International evidence shows that unionised workplaces are safer than non-unionised ones. Workers need strong rights and strong unions to protect themselves from injury and death through cost-cutting and the ever present desire of many employers to put profits ahead of safety.

The government’s plan to set up aggressive anti-worker bodies like the ABCC, with coercive powers designed to intimidate safety representatives and union activists, will lead to injuries and fatalities rising as they did under the previous ABCC.

Breaches ILO Conventions

The proposed ABCC bill denies a number of civil liberty rights to workers in the construction industry, breaching the Australian government’s international human rights obligations under customary international law.

The former Building and Construction Industry Improvement Act 2005 (BCII Act) – of which these Bills are an extension – was found by the UN’s International Labour Organisation (ILO) to repeatedly and unequivocally breach Australia’s obligations as a member-state and as a signatory to specific Conventions, including the Freedom of Association and the Right to Organise Convention, 1947 (No. 87); the Right to Organise and Collective Bargaining Convention, 1949 (No 98); and the Labour Inspection Convention, 1947 (No 81).

Australia is a signatory to all of these Conventions. They are basic human rights.

The proposed ABCC legislation allows for current penalties for contravening industrial laws to be tripled for construction workers and their unions. However, maximum penalties for employers who breach awards and agreements by underpaying employees, not paying them their lawful entitlements, and breaching safety regulations will not be tripled.

As the Wilcox Report concluded, “I do not see how (the history of the building and construction industry) can justify... the contravener... being subjected to a maximum penalty greater than would be faced by a person in another industry, who contravened the same provision and happened to be brought to justice. To do that would depart from the principle... of equality before the law.” (Transition to Fair Work Australia for the Building and Construction Industry 2009).

Building Code

The legislation also includes a bill which relates to a new Government Building Code, which the ABCC would police. If this code were to become law it would impose new rules on all companies that wish to tender for government work.

The Code would have a severe impact on workers’ rights, and a union’s right to negotiate with an employer.

The Code would exclude companies from tendering for government work if they had EBAs with clauses that currently exist (and would still be able to be negotiated in other industries) if they contain provisions for RDOs; shift allowances; the right to be consulted on redundancies and labour hire; and the right to be consulted on union meeting areas and publicity.

It would also prohibit any clauses that prevent unlimited ordinary hours worked per day; that guarantee the worker’s ability to have a day off on Christmas Day and Easter Sunday, public holidays; or include agreed stable and secure shift arrangements or rosters.

Importantly for young and older workers, it would remove any references to encouraging apprentices or discouraging discrimination against mature workers.

It would also remove the right for an equally qualified and experienced Australian worker to be retained in a redundancy situation over a temporary overseas worker. This lines up the industry for a flood of low-wage workers from overseas under the Trans Pacific Partnership and other free trade agreements.

The new Code also elevates the status and power of the proposed ABCC by making it the monitor and investigator of potential Code Breaches, at the same time as giving it the power to exclude builders from government contracts.

The priority now is to throw the Turnbull government out of office and defeat the ABCC Mark II legislation. “One Law for All” should mean the abolition of the ABCC and any industry specific inspectorates.

The above article draws on a briefing paper produced by the CFMEU and Parliamentary Bills Digests.

Background to ABCC

The Howard Coalition government held office from March 11, 1996 to December 3, 2007. During those years it launched an all out offensive against trade unions. There were two waves of anti-union laws courtesy Workplace Relations Minister Peter Reith. Reith, as Employment and Workplace Relations Minister, established the Cole Royal Commission into the building and construction industry (29-08-2001).

The Royal Commission was a political exercise aimed at vilifying the building and construction unions, the CFMEU in particular, and setting the scene for legislation that was to follow. The Cole Royal Commission handed down an interim report a year later, which led to the establishment of a Building Industry Taskforce (BIT) to police the industry. By then Tony Abbott had become the relevant Minister.

Cole delivered his final report on February 24, 2003. The hearings and the final report were heavily biased against the unions. None-the-less it was unable to find any evidence of organised criminal activity. It did, however, assert that there were high levels of industrial action in the industry in breach of civil industrial relations law.

It recommended sweeping changes to industrial relations laws specific to the industry. The outcome was the Building and Construction Industry Improvement Act 2005 (BCII) and the establishment of the Office of the Australian Building and Construction Commission (ABCC).

The Coalition used its control over the Senate which it gained in 2005 to push through the ABCC legislation.

In his Second Reading Speech, Workplace Relations Minister Kevin Andrews, told Parliament: “This bill comes before the parliament at a time when building industry unions in several states, in particular Victoria, are pressuring employers in the building industry to renegotiate existing agreements well in advance of their expiry dates.

“The CFMEU is also threatening industrial action in support of its demands. Such action is likely to be unlawful.” (09-03-2005) The bill introduced the concept of a statutory concept of “unlawful” industrial action for the building and construction industry.

Nowhere could there be such a clear statement of the government’s aim of outlawing legitimate trade union action.

Maximum financial penalties were increased to 1,000 penalty units ($110,000) for unions compared with $33,000 under the Workplace Relations Act – three times the penalties that applied to workers in other industries under the Workplace Relations Act.

For workers and union officials the maximum penalties were increased to 200 penalty units ($22,000).

The Commissioner had the powers to take court action to enforce workplace laws and to seek heavy penalties from the court for alleged breaches of these laws. It could also call in workers and officials for secret interrogation sessions with fines or up to six months jail for failure to co-operate.

The aim of the ABCC was to bust trade unions and trade union activity in the building and construction industry. It was provided with the most draconian, undemocratic powers to achieve these ends.

The bias of the ABCC is born out by the statistics. Of the 92 cases taken to court, all but a handful were directed at trade unions. Three were for sham contracting in an industry riddled with sham subcontractors who do not pay workers their sick leave, annual leave, superannuation, workers’ compensation and other entitlements. One was related to employer failure to adhere to statutory conditions of employment.

The ABCC was active between October 2005 and May 2012, when Labor amended the legislation.

Labor’s FWBC

The Gillard Labor government established its own Royal Commission headed by Justice Wilcox followed by its own legislation, which abolished the Office of the ABCC and created a new agency, the Fair Work Building and Construction (FWBC) under the Fair Work Act. The Office of the Fair Work Building Industry Inspectorate, was established for policing the industry. The Director of the Inspectorate replaced the ABCC Commissioner. The ABCC’s power to commence civil penalty proceedings was transferred to the Director of the Inspectorate, under the provisions of the Fair Work Act 2009.

It removed the higher penalties for building industry participants for breaches of industrial laws and introduced some safeguards for the exercise of the Director’s police powers. But it retained the interrogation sessions and criminal offences for failing to co-operate.

But, while making some improvements, the coercive, intimidatory and punitive nature of the ABCC remained. Right of entry continued to be very restricted and industrial action was still essentially outlawed.

The bias of the ABCC and the FWBC and the similar role each has played in attacking building trade unions, in particular the CFMEU, is born out in the statistics of each organisation. (See table below.)

A summary of the FWBC’s court cases (current and finalised) on its website shows that little has changed in practice under the FWBC apart from the fines being lower.

Trade union officials, organisers, members and trade unions are still being fined for “breaches” that constitute legitimate trade union activity. It could be industrial action around safety, unpaid entitlements and other breaches of the Fair Work Act by an employer.

As recently as April 16, 2016, the Federal Court issued orders penalising the CFMEU and 15 of its officials a total of $937,100 in relation to seven cases stemming from unlawful conduct on building sites across Adelaide in 2014.

Turnbull’s ABCC

The Abbott/Turnbull government’s Building and Construction Industry (Improving Productivity) Bill 2013 follows a similar pattern to its predecessors. There was the Heydon Royal Commission, wild allegations of union criminality and lawlessness in the industry which were used to justify the restoration of the Howard government’s ABCC.

The Heydon Royal Commission into alleged trade union corruption was a political witch hunt from the beginning to the end.

Alleged breach

ABCC Court Cases
(2004 – 2011)
FWBC Court Cases
(2011 – ....)
All (92) All (60)
Industrial action (36) Industrial action (16)
Right of entry (14) Right of entry (7)
Sham contracting (3) Sham contracting (4)
Coercion (19) Coercion (23)
Breach of Order (4) Breach of Order (5)
Freedom of association (7) Adverse action (1)
Adverse action (1) Conditions of employment (3)
Conditions of employment (1) Other (1)
Strike pay (7)  

Next article – “Chicago’s shame”

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