Enterprise bargaining 'the big building issue'


Enterprise bargaining 'the big building issue'

The key question arising out of the Royal Commission into the building and construction industry was whether enterprise bargaining as we understand it was the appropriate way for agreements in that sector to be struck.


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The key question arising out of the Royal Commission into the building and construction industry was whether enterprise bargaining as we understand it was the appropriate way for agreements in that sector to be struck.

So says solicitor Bob Whyburn, who is representing the construction union's national office in the Royal Commission headed by Justice Terence Cole and who a decade ago represented building unions before the NSW Gyles Royal Commission.

Addressing the Workforce enterprise bargaining conference in Sydney this week as Cole embarked upon a fifth week of Sydney hearings, Whyburn said another consideration was what form of agreement making would be preferable to the current system.

While last year's report prepared by the federal Employment Advocate Jonathan Hamberger, which led to federal Workplace Relations Minister Tony Abbott calling for the inquiry, did not identify enterprise bargaining as a significant issue, Whyburn said it was emerging as one of the main focuses of the inquiry.

Whyburn led the conference through a review of information prepared by, and available to, the Commission, to show that while there was a lot of noise about industry level and pattern bargaining, it often suited all industrial parties.

His starting point was two of the five discussion papers released in May by Justice Cole, both of which dealt with enterprise bargaining. One, prepared by the Commission, considers pattern bargaining; the other, prepared by ACIRRT, considers trends in agreements in the sector.

The first paper points out the fact that the industry involves multiple employers and employees working on different sites, sometimes for short periods, in a flexible and changing environment, what Whyburn called 'a very complex series of contractual relationships'.

Submissions and papers

The paper outlines a situation whereby due to the dominance of industry and project level negotiations and agreements, struck between head contractors, employer associations and unions, there was little bona fide enterprise bargaining occurring between sub-contractors and their workers.

As sub-contractors employ 95% of workers on major building sites, the paper says they are largely 'compelled' to enter the industry or project agreements if they want work. Head contractors, in their turn, acquiesce to union demands and adopt union-endorsed pattern agreements to minimise the risk of industrial action, according to the paper.

Yet the paper also makes reference to a 1999 Productivity Commission report, which found that: 'While a greater enterprise focus in negotiations is desirable it needs to be recognised that if all work arrangements were negotiated at an enterprise level, head contractors could lose important elements of control over building sites.'

The Master Builders Association had also previously prepared a submission to federal parliament which argued that various state and territory framework agreements negotiated by the MBA with unions were the best options for the environments in which they operated - 'so much for coercion', Whyburn concluded.

HR management an 'IR risk'

And the Australian Industry Group, in a submission to the Royal Commission, argued in favour of a national taskforce to oversee the industry and for an amendment to the Workplace Relations Act which would create mechanisms for the negotiation and certification of project agreements for major projects.

In that submission, Whyburn said the AiG argued that differences in wage rates, conditions of employment and human resource management practices between employers on the same project constituted the single largest industrial relations risk on major construction projects. Project agreements thus provided a basis to ensure stability and consistency across the multiple employers working on a project.

'In the experience of the AiG sub-contractors, including sub sub-contractors, do not object to the practice of head contractors establishing project agreements prior to the commencement of major construction projects,' Whyburn said. 'This would appear to be contrary to the assertion by the Royal Commission, to which I referred earlier, that sub-contractors have no freedom of choice.'

As for the Construction, Forestry, Mining & Energy Union itself, Whyburn said the union argued that if enterprise bargaining negotiations were to take place with individual employers sequentially, 'then a particular project could be subjected to ongoing disruption or even brought to a standstill'.

The union also argues that there was a receptive audience amongst many construction industry employers to the 'level playing field' as it applied to wages and conditions. This, Whyburn said, was the main reason the union argued that pattern bargaining was the predominant form of bargaining in the industry, and should be recognised by the Royal Commission as being 'both proper and practical'.

What the future holds

Meanwhile, Minister Tony Abbott has introduced another Bill attempting to outlaw pattern bargaining (see 29/2002). 'To say that the Minister is opposed to pattern bargaining is probably the understatement of the year,' Whyburn said.

Abbott's comments seemed to 'totally ignore the reality of the difficulties facing the players in this and many other industries', Whyburn said. 'To restrict the parties to negotiating on a very narrow enterprise basis would ignore the historical realities of the industry and potentially lead to outcomes that none of the parties seek.'

He said legislative reform was needed, not to outlaw pattern bargaining but to enshrine it as a legitimate approach.

In conclusion, Whyburn offered up his own opinion of likely recommendations Justice Cole would reach when he reported in December this year. These included:

  • Deregistration of the construction division of the CFMEU, which Whyburn said could not be done without an application to the Federal Court, 'and it would need a very brave conservative government to do that';
  • A separate legislative Act to govern the industry;
  • The establishment of an industry Taskforce - which Whyburn predicted would not be adequately funded.


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