July 2015
Practice Group:
Labour, Employment
and Workplace Safety
Building Industry Needs Better Foundations in
Law
By Alice DeBoos
This article was first published in the Australian Financial Review on Friday, 10
July 2015
Government grumbles over the Senate's failure to pass legislation reinstating the ABCC
are drowning out the real issues currently facing contractors. Rather than being fixated
on beefing up the powers of an already busy regulator the federal government should
focus on passing legislation to enable the Building Code 2014, and give critical certainty
to contractors trying to settle enterprise agreements without locking out the possibility of
working on government projects.
Commonwealth and State Implementation Guidelines, the silent warriors in shaping the
modern industrial environment in the construction industry, have been effectively
abolished or neutered.
The Commonwealth Implementation Guidelines were first introduced by the Howard
government in late 2005. The idea was that through the government's position as a client,
it could dictate behaviours and terms and conditions for those builders who chose to
tender for government work. In effect, the government was seeking to enforce industrial
terms on other parties - behaviour clearly unlawful if attempted by employers or unions.
This was a very successful tactic.
The important element of the Implementation Guidelines was that all tenderers needed to
comply with the document on Commonwealth funded work, on all privately funded work
and across all related entities. As a captive market, major contractors had no choice but
to change on site behaviours and ultimately the content of enterprise agreements to
remove union friendly content and practices.
The previous Labor Government continued this approach until its dying days when
Minister Shorten introduced the Building Code 2013. Fundamentally, it watered down the
content of the Implementation Guidelines to such an extent that it is now a somewhat
meaningless document, in effect only requiring compliance with the Fair Work Act and
nothing more.
Upon attaining office, the current government introduced into the Senate a draft Building
Code 2014, intended to replace its predecessor and reinstate the restrictions prohibiting
various types of clauses from appearing in enterprise agreements for contractors who
tender for Commonwealth projects. The industry has been instructed that enterprise
agreements approved or varied after April 2014 must comply with the Building Code
2014: that is, if passed, the Code will have retrospective effect.
More than a year later, no progress has been made and no legislation has been passed
to enable the Building Code 2014. The CFMEU has taken the position that the Building
Code 2014 is not law, and may never be law, and therefore contractors are free to agree
to any content provided it is lawful.
This now leaves contractors in the invidious position of trying to settle enterprise
agreements with no certainty on whether content will exclude them from working for the
largest client in the industry.
Building Industry Needs Better Foundations in Law
This tension is irreconcilable.
The nature of the industry and its unions require a strong arm from government to make
sure projects are built on time and on budget. Certainty on the future of the Building Code
2014 is required to enable the industry to bed down conditions for the next three years. If
passage through the Senate is hopeless then the industry needs the government to look
at other options. Either way, the construction industry is too important to be left in the
current quagmire.
Authors:
Alice DeBoos
alice.deboos@klgates.com
+61.2.9513.2464
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