The ABCC ‘backfires’ on the government

Wednesday's breakthrough for the Prime Minister and Employment Minister may haunt them in years to come.

Wednesday's breakthrough for the Prime Minister and Employment Minister may haunt them in years to come. Photo: AAP

The government’s ‘big win’ on industrial relations, on which it fought two elections, has been reduced to little more than a rebranding exercise, according to a legal expert.

Prime Minister Malcolm Turnbull said the passage of the ABCC bill through the Senate on Wednesday was a “vital reform” that would benefit every Australian family by boosting productivity in the construction sector.

Copnstruction worker. Photo: Getty

Many of the most contentious parts of the ABCC bill were amended by crossbench senators on Wednesday. Photo: Getty

“Today we are restoring the rule of law to the construction sector. This is a great day for Australian families. This is not union-busting, this is economy-boosting.”

But Professor Andrew Stewart, an expert in employment law at The University of Adelaide, said the heavily amended bill would change very little.

“The government was clearly desperate to get this legislation through, and clearly the politics and the optics of being seen to get a very rare win trumped any notion of policy purity.”

The “major exception” is that the ABCC may result in significantly eroded conditions for construction workers, and cause massive financial harm to employers, in coming years, the professor said.

But these harms would be the result of a new building industry code of practice, which Employment Minister Michaelia Cash now has the power to impose on Commonwealth contractors, rather than anything written in the bill itself.

This view was echoed by Labor’s industrial relations spokesman Brendan O’Connor, who said the Prime Minister had “backflipped” to save his leadership.

Employer groups of all stripes – including The Business Council of Australia, the Australian Industry Group, the Australian Constructors Association and the Australian Mines and Metals Association – welcomed the passage of the bill.

What will change

Because of the extensive amendments, the Law Council of Australia has withdrawn its concerns that the bill would breach the human rights of construction workers.

“The government, and the crossbench, have listened to a number of concerns voiced by the legal profession, and have passed legislation that will help tackle unlawful behaviour while including some important legal safeguards,” Law Council president Stuart Clark told The New Daily.

dave noonan

After the bill passed, CFMEU national secretary Dave Noonan vowed to continue fighting for worker rights, ‘however bad the laws’. Photo: AAP

The ABCC will expend significant taxpayer funds to rebrand the current regulator, the Fair Work Building and Construction.

It will also bring workers, unions and employers involved in offshore construction projects and the transportation of building materials within the ambit of the new regulator.

It may financially cripple the CFMEU by increasing the maximum fines courts may impose for illegal industrial action, such as picketing.

But in its original form, the bill would have given the new regulator the power to force a worker to give evidence under oath, without the prior approval of a judge or tribunal. This is no longer the case.

ABCC officers would also have been empowered to enter the homes of workers without a judicial warrant. This was amended.

And the courts will no longer be prevented from reviewing decisions made by the regulator.

The ‘worst part’ may backfire

Under the ABCC, the Employment Minister now has the power to impose a building code on government contractors, which may then spread to all major building employers.

Ms Cash told Sky News on Wednesday night that the code will come into effect on the day the Governor-General gives royal assent to the ABCC bill.

michaelia cash

Employment Minister Cash says she will now push ahead with a new building code for government contractors. Photo: AAP

The code, which the Greens described as the “worst part” of the bill, will use the government’s deep pockets as a builder of infrastructure, rather than Parliament’s legislative power, to strike down enterprise bargaining agreements (EBAs).

Based on the wording proposed by the Abbott government, it will prevent “virtually everything” construction unions would seek to negotiate, Prof Stewart said.

Any building company with an EBA in breach of the code would be ineligible for lucrative federal contracts. But even this attempt to curb union power may backfire.

The code won’t invalidate any existing agreements until 2018, because of a last-minute amendment by Senator Derryn Hinch.

In the interim, unions will either secure “massive” pay rises to compensate their workers for lost rights, or simply hold out until employers face the threat of disqualification, Prof Stewart said.

“The code operates on the premise, essentially, that the procurement threat can be used to induce employers to effectively cease dealing with unions – except of course they can’t because they’re stuck with existing agreements, and their existing work forces are unionised.

“How can employers magically persuade their workers and unions to give up virtually everything that they have fought for in collective bargaining, other than by paying a massive wage premium?”

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