Sledgehammer to crack a nut – or appropriate response to problem?

by Jim Feehely and David Jury

The government has now released for comment the Building and Construction Industry Improvement Bill (Bill), which if passed, will create radical change in the non-domestic building industry.

The 200 plus page Bill contains the government’s way of implementing a number of the recommendations arising from the Cole Royal Commission into the Building and Construction Industry. Commissioner Terrance Cole RFD QC, in a 23 volume report to Federal Parliament in March 2003, concluded, after hearing evidence from over 700 witnesses, that the building industry was a ‘special case’ that required very specific reform to ensure that the rule of law returned.

The response of the Federal Government is that the Bill contains measures that will if passed by parliament:

  • establish the one stop shop for the building industry of the Australian Building and Construction Commission (ABCC)
  • create a new Building Code that will set worlds best practice for safety on building sites
  • establish a Federal Safety Commissioner who will be responsible for educating the industry on safety issues and advising on safety disputes
  • dramatically modify industrial conditions in the industry by such measures as reducing pattern bargaining, eliminating non-genuine safety industrial actions; reforming award structures and reducing the ability of union officials to enter workplaces.

The reforms suggested by the Bill are dramatic and widespread and will if Democrat Senators vote in its favour, mean a wholesale change to the way in which the industry is organised. There will be a greater institutional focus on workplace safety and individual rights of association and a consequential lessening of the structural influences of trade unions.

The aim that the Government has set itself of reforming the building industry is very clearly met in the Bill. Whether the ultimate aim of returning the ‘rule of law’ to the construction industry is achieved and at what cost will be a matter that only time will tell.

The Details


The Bill proposes that the ABCC be established with the primary role of ensuring compliance with the new industrial and commercial regime for the operation of the industry. The ABCC will be headed by a full time Commissioner with deputy Commissioners. The ABCC will have a permanent presence in Melbourne, Sydney, Brisbane and Perth with the other capitals being serviced by each of these offices.

The Commissioner will also have the responsibility of monitoring compliance with the new Building code (discussed below) and will have an advisory function in promoting best workplace practice. The Commissioner will also be able to act on the advice of deputy Commissioners and inspectors and where appropriate, act quickly on unlawful industrial action by seeking injunctions.

The ABCC is also to have an advisory role assisting industry participants in understanding their obligations under the law. The ABCC will be a ‘one stop shop’ with the ability to make appropriate referrals to other government agencies including the ACCC where it is concerned about any aspect of the building industry.

The Building Code

Chapter 3 of the Bill provides for the Minister to issue a new Building Code that will be applicable to anyone doing building work who is a corporation or who is doing Commonwealth government work. The new Building Code will replace the existing code that has been in place since 1997 on all Commonwealth government projects.

While the draft Bill is silent on the content of the proposed Code, the Ministerial statement issued with the Bill indicates that the Code is aimed at promoting best practice in building and construction techniques and in Occupational Health & Safety (OH&S).

The policy seems to be for the Code to be the catalyst for some structural change through the industry to ensure that all industry participants adhere to the highest possible standards in future work.

Federal Safety Commissioner

The Bill also aims to establish a new statutory position of the Federal Safety Commissioner (FSC), whose role will be to promote and ensure compliance with OH&S standards in the industry. The Commissioner will be able to enter building sites to ascertain compliance with OH&S requirements in the new Building Code and other applicable law.

The objects of the role of the Commissioner as set out in the Bill are not only regulatory but also educational.

The same sections that establish the office of the FSC are also designed at eliminating non-genuine safety related industrial action. Employees who take industrial action for safety related reasons will not be allowed to be paid unless the safety dispute has been notified to the FSC and then only in limited circumstances. It will be a criminal act to pay someone who takes industrial action where the dispute has not been notified to the FSC

Modified Industrial Conditions

The most significant parts of the Bill are those that propose changes to the industrial conditions in which the building industry operates.

Generally, the Bill seeks to take away the collective power of unions in the building industry while promoting individual rights to negotiate things like contracts of employment.

The Bill proposes that pattern bargaining will be severely limited and that employers or the ABCC will be entitled to approach the Court for an injunction if pattern bargaining occurs. The AIRC will not be entitled to certify an agreement if they think it was obtained by pattern bargaining.

Industrial action will be allowed in limited circumstances where there is a period of bargaining. Otherwise, except for minor restrictions, industrial action will be outlawed. The ABCC will have a role in ensuring compliance with industrial action obligations. Measures also to be put in place to ensure that genuine bargaining occurs at a work place level for both employers and employees.

The Bill proposes that there be freedom of association through individual employees being allowed to choose whether or not they join a union and/or an employer association. The Bill contains a number of prohibitions on coercing people to join organisations and outlaws industrial action because of memberships of associations. Allied to these changes are those which outlaw discrimination based on whether or not particular forms of agreement have been executed. These will also prohibit requirements that particular subcontractors or contractors be engaged.

The Bill severely limits the right of Union Officials to enter workplaces and provides that a right of entry can only be exercised once an appropriate permit has been issued to a fit and proper person. Permit holders will be entitled to enter provided 24 hours written notice is provided to the occupier of the site and the ABCC and the purpose of the right of entry is outlined. If Union Officials or others abuse these rights they will be liable to fines.

There are also substantial enforcement powers for the ABCC involving ranges of fines from $22,000 to $110,000 for what are called tier A offences and for tier B offences $11,000 to a minimum of $2,200.

Public Consultation

The Bill is available for public comment until 17 October 2003 with the Government hoping to introduce it to Federal parliament in this year’s spring sittings.


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