Tougher construction project agreements required: Ai Group

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Tougher construction project agreements required: Ai Group

Building and construction reforms relating to project agreements need to go further than the Cole Commission recommendations, according to the Ai Group’s Position on the Final Report of the Royal Commission into the Building and Construction Industry released today.

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Building and construction reforms relating to project agreements need to go further than the Cole Commission recommendations, according to the Ai Group’s Position on the Final Report of the Royal Commission into the Building and Construction Industry released today.

The Ai Group is calling for amendments to the Federal Workplace Relations Act to ‘provide a genuine mechanism for the certification of project agreements’ in the construction industry.

The position paper made it clear that pattern bargaining had no place in the building and construction Industry and should be outlawed.

Ai Group Chief Executive, Bob Herbert said, ‘The Ai Group has been a major supporter of the work of the Royal Commission.

‘Whilst we support the bulk of Commissioner Cole’s Final Report we have nonetheless looked carefully and critically at the Commissioner’s recommendations in order to develop a constructive response, which we hope, can deliver sustained reform.’

The Ai Group’s position paper disagrees with the Cole Commission findings ‘that the only forms of project agreements which should have force and effect in the building and construction industry are those made under s170LC [multi-business agreements] or 170LL [greenfield agreements] of the Federal Workplace Relations Act.’

According to the Ai Group, ‘Section 170LC agreements are of little use in the construction context because all of the organisations to be bound by the agreement need to be identified at the time when the agreement is certified.

‘All such organisations need to sign the agreement and their employees need to vote in favour of the agreement.

‘It is impossible to identify all employers that will work on a major project at the commencement of the project.

‘The other mechanism - s170LL - provides even less utility because such agreements can only apply to single businesses.’

To remedy these problems, the Ai Group want the Cole Commission’s proposed Building and Construction Improvement Act to enable the certification of project agreements if they meet the following criteria:

  • agreements only apply to major projects - the parameters need to be defined, but should take into account project size, complexity and demarcation;
  • negotiations take into account the opinions of subcontractors who will be bound by the project agreement, as well as specific parties to the agreement, such as employers and unions;
  • the agreement is in the public interest;
  • project agreements are certified by a presidential member of the AIRC or the Full bench of the AIRC;
  • project agreements co-exist with enterprise agreements, not replace them; and
  • project agreements bind all constitutional corporations that work on the project - the majority of employers that perform work on major projects are corporations.

In line with existing multiple-business agreement provisions of the Federal Workplace Relations Act, protected industrial action should not occur during project agreement negotiations, the Ai Group said.

‘It is a fundamental tenet of the Act that protected action applies exclusively for enterprise bargaining - not bargaining across an industry, a sector, a geographic area or more than one employer.

‘Further, consistent with s170MN of the Workplace Relations Act, industrial action should not be protected where it is taken by employees working on a project and bound by a certified project agreement, despite the fact that enterprise agreements applicable to such employees may expire during the period of the project.’

According to the position paper, if the proposals were accepted and became law, unregistered industry agreements, such as the Victorian Building Industry Agreement, the Queensland Construction Sector Statement of Intent and the Tasmanian Framework Agreement should become void, unlawful and unenforceable.

But the Ai Group didn’t support investigations by the Australian Competition and Consumer Commission into whether such agreements breached the Trade Practices Act.

‘The emphasis should be on creating the right environment for the future, not on exploring new legal avenues to punish union and employer parties who have negotiated or agreed to be bound by such industry agreements in good faith, believing that such instruments were lawful,’ the position paper said.

For more information see: The Ai Group recommendations on the Cole Royal Commission into the Building Industry.

 

 

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