This morning, the Turnbull Government finally secured passage of the Building and Construction Industry (Improving Productivity) Bill (ABCC Bill) by the Senate.

This was one of two industrial relations bills which triggered this year’s double dissolution election. The other bill, establishing a Registered Organisations Commission, was passed by Parliament last week.[1]

The ABCC Bill was passed by a 36-33 vote, with the support of One Nation, the Nick Xenophon Team (NXT), Senator Leyonhjelm and Senator Hinch. The Government agreed to significant amendments in order to obtain passage of the bill, including amendments relating to the operation of the proposed new Building Code.

The ABCC Bill will take effect from the day after it receives royal assent. It can be expected that this will occur fairly quickly, given that the Government has already waited three years to get the legislation through Parliament.

In this article, we provide a brief summary of the key changes introduced by the ABCC Bill and the major amendments agreed to by the Government.

KEY FEATURES OF THE ABCC BILL

The ABCC Bill fulfils the Coalition’s election commitments to re-establish the Australian Building and Construction Commission (ABCC), and to promote a stronger approach to enforcement of laws prohibiting unlawful industrial action and coercion in the construction sector.

The Government has frequently described the ABCC Bill as a necessary measure to restore the rule of law in the building industry. This was also recommended by the Royal Commission into Trade Union Corruption.

The ABCC was originally established by the Building and Construction Industry Improvement Act 2005 (Cth) (BCII Act), implemented by the Howard Government in response to the 2003 Royal Commission into the Building and Construction Industry.

However, in May 2012 the Gillard Government’s Fair Work (Building Industry) Act 2012 (Cth) (FWBI Act) abolished the ABCC and replaced it with the Fair Work Building Industry Inspectorate. The new body, known as Fair Work Building and Construction (FWBC), has had significantly reduced powers.The FWBI Act also lowered the penalties applicable to building industry participants for breaches of industrial laws, and limited the circumstances in which unlawful industrial action attracted penalties.

In addition to reviving the ABCC, the most important aspects of the ABCC Bill are as follows:

  • The definition of ‘building work’ which determines the scope of the legislation’s application, and therefore of the ABCC’s oversight, is expanded to cover the transportation or supply of goods to building sites and offshore resources platforms.
  • New prohibitions are imposed on the organisation or taking of unlawful industrial action and unlawful picketing, such as the disruptive pickets on the Grocon Myer Emporium site in 2012.
  • The maximum penalties for unlawful industrial action and unlawful picketing are increased from $54,000 to $180,000 for corporate entities (including unions), and from $10,800 to $36,000 for individuals.
  • The ABCC’s investigatory and enforcement powers are enhanced. For example, the Bill removes the current provision which prevents the regulator from commencing or proceeding with enforcement actions, where the relevant parties have settled the dispute between them.

KEY AMENDMENTS AGREED TO BY THE GOVERNMENT

After two late night sittings debating it in the Senate, the Government agreed to a number of amendments in order to secure passage of the ABCC Bill.

The following are particularly important to note:

  • The ABCC Bill will enable the Government’s proposed new Building and Construction Industry (Fair and Lawful Building Sites) Code 2014 (New Building Code) to come into effect (unless it is disallowed in the Senate). The restrictions on enterprise agreement content under the New Building Code were going to apply to agreements made after 24 April 2014.

    However, the Government has agreed to an amendment, which will now give building industry participants with enterprise agreements made before the New Building Code is issued until 29 November 2018 to ensure their agreements are Code-compliant. This is a major change, as it resolves the considerable uncertainty building companies have faced over whether agreements made since April 2014 would make them ineligible for Commonwealth-funded construction projects.
  • Requirements relating to locally-made building materials and content have been inserted into the procurement standards for those tendering for Commonwealth-funded work under the New Building Code.
  • Some constraints have been imposed on the ABCC’s conduct of investigations and other enforcement action. For example, the ABC Commissioner is required to ensure “that the policies and procedures adopted and resources allocated for protecting and enforcing rights and obligations arising under this Act, designated building laws and the Building Code are, to the greatest extent practicable having regard to industry conditions based on complaints received by the ABC Commissioner, applied in a reasonable and proportionate manner to each of the categories of building industry participants.”
  • While the ABCC will continue to have the power to conduct compulsory witness examinations, the framework of Administrative Appeals Tribunal scrutiny over this process will also remain in place (with some changes). The Government had intended to reduce the limits on the ABCC’s compulsory evidence-gathering powers.
  • A Working Group is to be established under the legislation to examine the issue of security of payments for building contractors, a key issue pushed by NXT.

Corrs will soon provide a more detailed assessment of the ABCC Bill and the New Building Code, covering their implications for construction companies and contractors.