Earlier today, the Federal Government released the report of the Honourable Murray Wilcox QC into the implementation of a successor to the Australian Building and Construction Commission (ABCC) within the ‘Forward with Fairness’ industrial relations system.
Consistent with the government’s policy, the report recommends continued regulation of the building and construction industry by an autonomous body, called the Building and Construction Division (BCD) of the Office of the Fair Work Ombudsman.
The key recommendations of the report are:
- the BCD should retain the coercive powers of the ABCC, subject to new safeguards and oversights
- the National Code of Practice for the Construction Industry and the Australian Government Implementation Guidelines for the National Code of Practice for the Construction Industry (the Code and Guidelines) should continue to operate, but be ‘formalised’ through legislative enactment, preferably as a disallowable instrument under the relevant legislation, and
- the Code and Guidelines should also be reviewed to remove current ambiguities and remove the need for code Compliance by off-site contractors and material suppliers.
Recommendations
Structure of the BCD
The report recommends that the BCD be housed, administratively, within the Office of the Fair Work Ombudsman (WO) but that it have operational autonomy from the WO. It would be administered by a Director appointed by the Minister, who would also be part of an advisory board comprising the Director, the Fair Work Ombudsman and other part-time members.
Powers of the BCD
The controversial coercive powers of the ABCC are recommended to continue as there is ‘still such a level of industrial unlawfulness in the building and construction industry’. However, the report recommends new constraints on the exercise of these powers by requiring that a Notice to Attend be issued by a Presidential Member of the Administrative Appeals Tribunal (AAT) before a person can be compelled to give evidence. The Presidential Member would be required to have regard to the importance of the evidence likely to be adduced, balanced against the importance of the investigation being conducted and the impact of the interrogation on the person summoned. There also would be a general ‘reasonableness’ overlay to any such application.
The wide range of factors to be considered create a very broad discretion for the Presidential Member. No reference is made in the report to whether or nor not applications to the Presidential Member could be held in public, though it does recommend that decisions should not be subject to judicial review under the Administrative Decisions Judicial Review Act 1977 (Cth) (ADJR Act), given that such proceedings could be used to delay and frustrate investigations.
Distinct treatment of the industry
Whilst the report found an ongoing need for a specialist regulator, it recommended against additional industry-specific prohibitions on industrial action within the building industry, or higher penalties for breaches of industrial laws within the industry. The general rules regarding unlawful industrial action and penalties that will apply under the Fair Work Act should instead apply. Maximum penalties under the BCII Act are currently $110,000 for organisations and $22,000 for individuals. Under the Fair Work Act maximum penalties for unlawful industrial action or breaches of industrial instruments are $33,000 and $6,600 respectively.
Code and Guidelines
The report suggests that the Code and Guidelines be retained, but that off-site contractors and material suppliers be excluded from the need to be Code compliant. It also recommends that the Code and Guidelines restrict their application to higher level policy objectives, rather than micro-managing aspects of building and construction practice. The report also raises the possibility of extending the Code and Guidelines to all constitutional corporations that perform building work, rather than just parties who wish to tender for Commonwealth building contracts or perform work on Commonwealth-funded projects, as is currently the case.
The report concludes that the current status of the Code and Guidelines as instruments issued and amended by the Minister is unsatisfactory and the lack of a review mechanism for Code compliance decisions is ‘outrageous’. It proposes that the Code and Guidelines be formalised by legislation, under which the Code and Guidelines would be disallowable instrument. Decisions made under such a system would be subject to both merits review by the AAT and judicial review under the ADJR Act.
The report also suggests that the Code and Guidelines be reviewed in a more general manner, with a view to considering whether they should also reflect other government policy goals, such as encouraging the employment of apprentices and women in the industry, or environmental objectives such as materials recycling and energy and water efficiency.
Implications for employers
The retention of an autonomous, industry-specific body and the proposed retention of the coercive powers provides scope for the continued ‘cleaning up’ of the building industry. In practice, however, the proposed safeguards may slightly ‘water down’ the application of those powers. Nonetheless, the recommendations, if implemented, would give substance to the government’s commitment to retain an effective ‘cop on the beat’ that will provide a higher level of oversight and enforcement than that which applies to other industries.
The proposed strengthening of the Code and Guidelines into a legislative form offers the prospect of greater certainty and consistency in their application. If enacted, it will provide employers with the opportunity to test the merits of Code compliance decisions, and in time, would result in a more simple and settled system, rather then the current, less formal, system. The exclusion of material suppliers and off-site contractors from Code compliance will also make compliance simpler for many employers whose non-building activities are currently ‘caught’ by the Code and Guidelines.
This article was written by John Cooper, Partner, Ben Davies, Solicitor and Angel Aleksov, Graduate, Melbourne.
More information
For information regarding possible implications for your business, contact a member of the Employee Relations team.