This year has been a significant year for the Office of the Australian Building and Construction Commissioner (ABCC) and for the building and construction industry in general.

Here we will recap on the milestones in 2009 that have ensured that the ABCC’s role and powers have continued to be the topic of much debate amongst stakeholders in the building and construction industry.

Most significantly, the abolition of the ABCC and replacement with another inspectorate, initially proposed to be effective from 1 February 2010, has been postponed as a consequence of the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2009 (Cth) not being addressed as scheduled in the Senate’s last week of sitting for 2009.

The debate still continues, both in Parliament and amongst participants in the building and construction industry, regarding the extent to which the ABCC’s powers should be retained or abolished for a new industry watchdog.

One thing is for certain - special measures will continue to be taken with the overall aim of providing a balanced framework for cooperative, productive and harmonious workplace relations in the industry. Such measures will continue to be in the spotlight and the subject of debate, in Parliament and amongst industry participants in 2010.

Milestones

The significant milestones for the ABCC and the building and construction industry in 2009 were:

  • Hon Justice Murray Wilcox QC’s report into the transition to Fair Work Australia for the building and construction industry, released on 3 April 2009
  • The report on the allocation of ABCC resources published in June 2009 in response to the Minister, Julia Gillard’s request
  • Commencement of the Fair Work Act 2009 (Cth) on 1 July 2009
  • The Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2009 (Bill) being tabled in Parliament
  • The revised Implementation Guidelines for the national Code of Practice for the Construction Industry, introduced on 1 August 2009
  • Senate Committee Report into the Bill, published in September 2009
  • A range of successful prosecutions launched and completed, with significant and increasing penalties being imposed by the Courts.

Office of the Fair Work Building Industry Inspectorate

The ABCC is intended to be replaced by the Office of the Fair Work Building Industry Inspectorate, a standalone agency, in 2010. However, the abolition of the ABCC, initially planned for 1 February 2010 has been postponed and will not be settled until the Senate resumes sitting on 2 February 2010.

It is expected that the building industry specific offences relating to industrial action and coercion will be removed as recommended by the Wilcox Report.

It is likely that the Inspectorate will still be able to compulsorily obtain information or documents relevant to an investigation from certain persons. However, new measures will be introduced, significantly, that the powers will only be able to be exercised by the Inspectorate’s Directors and Deputy Directors.

The Government’s policy is to substantially reduce the statutory penalties that may be imposed by prosecutions of building industry participants, to the same levels that apply in other industries.

Does the building industry still warrant ‘special attention’?

There is still divided opinion in the building and construction industry regarding specific regulation of the industry. These range from, at one end, it being harsh and discriminatory, and at the other it being responsible for significant behavioural improvements, a more harmonious work environment and an overall increase in productivity in the industry. While industry unions might argue

the extent any improvement to the culture of the building and construction industry since the Cole Royal Commission Report in 2005 can be attributed to the ABCC and the Building and Construction Industry Improvement Act 2005 (Cth), given the value of the industry to the Australian economy and the continuance of unlawful activities to achieve industrial agendas, support for an industry specific regulatory body is expected to continue.

How has the ABCC exercised its compliance powers?

One of the most controversial powers of the ABCC has been its compliance powers. The ABCC, since 1 October 2005, has had the power to require a person to provide information or documents or to answer questions under oath or affirmation. A failure to comply with a notice is an offence, with a penalty of up to 6 months imprisonment. According to the ABCC Annual Report for 2008/09, the ABCC used these powers to conduct 60 examinations.

On one view, without these powers, ABCC investigations would otherwise be stalled.

Investigations and prosecutions

The ABCC continues to investigate suspected contraventions of workplace laws and initiate prosecutions.

According to its Annual Report, the ABCC:

  • conducted a total of 262 investigations, the majority taking place in New South Wales and Victoria for alleged unlawful industrial action, right of entry and coercion
  • conducted 48 penalty proceedings before the courts, including 21 proceedings that were commenced in this period, on the basis of unlawful industrial action, coercion and freedom of association
  • conducted four proceedings in the AIRC to revoke or suspend right of entry permits
  • intervened in 23 AIRC proceedings
  • intervened in 11 Federal Court proceedings.

Building Industry Code

According to the ABCC Annual Report, the number of projects to which the National Code applies rose to 548, a 26% increase on the 2007-08 figure. Over the period that the ABCC has been monitoring the National Code, the number of projects subject to it has increased five-fold.

Many head contractors as a matter of ‘best practice’ have required that all contractors working on privately funded projects also adopt practices consistent with the National Code.

Where to from here?

The building and construction industry is and will continue to be a key industry sector in Australia, responsible for significant revenue and jobs. Regulation of the industry will continue with a Government-stated aim of providing a balanced framework for cooperative, productive and harmonious workplace relations in the industry.

The ABCC may be abolished and replaced by the Office of the Fair Building Industry Inspectorate, although the timing of this is uncertain.

The necessity and effectiveness of an industry regulatory body and the extent of its role and powers will no doubt continue to be monitored by governments, unions, employers and industry groups.

It is unpredictable what impact the removal of building industry specific offences, any alteration to the powers of the Office of the Fair Building Industry Inspectorate or the reduction in applicable statutory penalties will have on the culture of the building and construction industry.

Many suggest that, unfortunately, unlawful conduct and industrial disruption within the building and construction industry will likely continue, despite industry specific regulation.