In a previous newsletter,1 we outlined the details of the Building and Construction Industry Improvement (Transition to Fair Work) Bill 2009 which proposes to amend the Building and Construction Industry Improvement Act 2005 (Cth) (BCII Act) to abolish the Australian Building and Construction Commission (ABCC) and replace it with a new body with revised powers—the Building Industry Inspectorate (Inspectorate). The Bill was introduced to Parliament in June 2009 and is currently before the Senate.

Yesterday, the government released proposed amendments to the Bill that will introduce two changes:

  1. Increased powers for the Minister for Workplace Relations to direct the Inspectorate in carrying out its duties, and
  2. Create a new power for the Inspectorate to initiate or intervene in proceedings for contempt of court where court orders are not complied with.

Increased powers to direct the Inspectorate

Under the proposed amendments, the Minister would have clearer powers to direct the Director of the Inspectorate to focus on particular industrial ‘trouble spots’. The existing legislation provides the Minister with a general power to direct the ABCC. The new powers go further and permit the Minister to give directions in relation to the allocation of resources. This would permit the Minister to direct the Inspectorate to pursue particular matters which the Minister considers most appropriate.

The Bill, as currently drafted, gives the Minister the power to direct the Director in relation to the ‘policies, programs and priorities’ of the Director; and ‘the manner in which the Director is to perform the functions or exercise the powers of the Director.’

The amendment seeks to enable the Minister to give directions in relation to ‘the allocation of resources by the Director in connection with the performance of his or her duties or the exercise of his or her powers’. This new power is much broader and could, conceivably, enable a Minister to direct which types of projects, or parts of the industry or the economy the Inspectorate is able (or not able) to focus on.

The proposed Ministerial powers are much more prescriptive than the existing power under the BCII Act that enables the Minister to direct the Australian Building and Construction Commissioner in relation to the manner in which the Commissioner must exercise or perform their functions under the Act. In June 2009, the Minister used these powers to issue a direction that the so-called ‘coercive powers’ to gather evidence under the BCII Act must only be exercised subject to certain limits, with those limits mirroring many of the proposed limits on the coercive powers contained in the current Bill. That direction was subsequently disallowed by the Senate.

The government has indicated that the power would be used to direct the Inspectorate to concentrate on particular industrial ‘trouble spots’. It has indicated that recent unlawful industrial action in the Western Australian resources industry is the kind of trouble spot that it has in mind.

Power to intervene or commence contempt of court proceedings

The second proposed amendment will enable the Inspectorate to take court action to ensure compliance with court orders. The power will apply to orders arising from proceedings under either the Fair Work Act 2009 (Cth) or the amended BCII Act (to be known as Fair Work (Building Industry) Act) which involved ‘building industry participants’ or ‘building work’ as defined under the BCII Act. The powers may be exercised regardless of whether the Inspectorate or the ABCC was involved in the original proceedings.

The existing BCII Act allows the ABCC to intervene in court proceedings but does not include a specific power to initiative contempt proceedings. Non-compliance with court and Commission orders was identified by the Cole Royal Commission in 2003 as a particular problem in the building industry.

Implications for employers

The government’s amendments add some further detail to its proposed regulatory regime to replace the ABCC. However, the passage of the Bill at present seems unlikely. The Bill was debated in the Senate this week and, at this stage, it appears that both these amendments and the Bill itself will be rejected by the Senate. Both the Opposition and Senator Fielding have indicated that they remain opposed to the Bill and the amendments and are opposed to any change to the ABCC. A significant amount of political negotiation would appear to be necessary to enable the Bill to be passed in any form in the foreseeable future. If the Bill is not passed then the existing BCII Act will remain in force and the ABCC will continue to operate under this Act.