Award bars employment of subcontractors on conditions less favourable than award

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Award bars employment of subcontractors on conditions less favourable than award

The NSW IRC has approved award provisions for two of Sydney’s major construction sites which require the principal employer to provide certain conditions, including minimum pay, mandatory for subcontractors engaged on the projects.

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10/03

 

The NSW IRC has approved award provisions for two of Sydney’s major construction sites which require the principal employer to provide certain conditions, including minimum pay, mandatory for subcontractors engaged on the projects.

The NSW Labor Council and Bovis Lend Lease Pty Ltd applied to the IRC seeking the two building and construction industry project awards for the$41 million Barclay Mowlem apartment project in Camperdown and Bovis Lend Lease’s refurbishment of the Intercontinental Hotel in the CBD.

The IRC said both projects were complex undertakings of the kind which historically involved difficult industrial relations issues, and often were capable of generating substantial industrial disputation.

It said the proposed awards were in a form now well familiar to the Commission and were intended to produce an optimal climate for the undertaking of the project through maximising efficiency and productivity combined with fair and safe workplace conditions. Such awards typically provide clauses concerning productivity initiatives, dispute resolution, occupational health and safety and basic workplace conditions and standards. 'In the light of the present experience, the provisions of these instruments are wholly desirable as a matter of industrial merit.'

Provisions

The contractor clauses stipulated that where the principal engages subcontractors it should make it a contractual condition that they would not employ persons on wages and conditions less favourable than those set out in the project award. The provisions apply to both directly employed persons and subcontractor employees.

The NSW Labor Council gave evidence that companies which come onto a project usually have their own industrial instruments in place, e.g. they are bound by various construction awards or have their own enterprise agreement. It said project awards were designed to ensure that this myriad of industrial arrangements did not 'make the process of construction dysfunctional with different standards, practices and management techniques causing disharmony and also affecting the control that the principal contractor has in meeting clearly set out time frames, milestones, budgets, contractual and legal obligations'. It also said the clauses ensured all subcontractors were tendering on a level playing field.

Bovis Lend Lease added that project awards provided some certainty as to project costs and delivery and, as minimum entitlements are agreed at the outset, projects are rarely disrupted by industrial action. As a result of this, the company said it was able to use project awards as a marketing tool when tendering for construction work.

Jurisdiction

The Commission considered that there was jurisdiction to grant the contractor clauses by virtue of an implied power under s10 of the Act.

It noted that the expression 'conditions of employment' in s10 of the Act was defined in the Dictionary to the Act as including, in its meaning, 'any provisions about an industrial matter'. Vice President Walton said he viewed that implication as available.

See: Re Lend Lease Hotel Intercontinental (Stage 1) Project Award and Another [2003] NSWIRComm 314, Walton J,(26 September, 2003).

 

 

 

 

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