Make head contractors responsible for pay: ACTU

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Make head contractors responsible for pay: ACTU

New laws allowing employees of subcontractors to take action against head contractors to recover entitlements were proposed by the ACTU yesterday at the opening session of the Senate Committee Inquiry into the building industry Bill.

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Source: WorkplaceInfo
2003

 

New laws allowing employees of subcontractors to take action against head contractors to recover entitlements were proposed by the ACTU yesterday at the opening session of the Senate Committee Inquiry into the building industry Bill.

The call for tougher security of payment laws came amidst the ACTU‘s and State and Territory Governments’ demand for the Senate Committee to dump the building industry legislation altogether.

In its place, the ACTU and the State and Territory Governments want a tripartite system of employers, Governments and unions.

The ACTU want the tripartite to address non-payment of entitlements, tax evasion, OHS and training and skills shortages.

Security of payments

Most employers in the building industry are subcontractors who are dependent on payments from head contractors, the ACTU submission said.

‘Small employers, who make up the vast majority in the building industry, work on very tight margins, with little cash flow flexibility.

‘If they haven’t been paid, they can’t pay their workers, and this is a problem that can extend for months, or even end in the employer’s insolvency.’

The ACTU claims that non-payment by head contractors amounts to employees subsidising employers.

The Cole Royal Commission recommended the enacting of security of payment legislation; education campaigns on security of payment; a study of compulsory security payment insurance; tenders to promote security of payment; and using the prequalification process to address the situation.

The Cole report also included a draft security of payment Bill which, the ACTU claims, ‘was supported by most of the organisations which made submissions, including unions and employers.’

But the ACTU is concerned the Government is not treating security of payment problems as seriously as the industrial recommendations.  

‘It is extraordinary that the Government has not seen fit to implement a recommendation which has the support of the Royal Commission and key participants, and for which most of the work is done. 

‘Consensus issues would appear to be of no interest to the Government.’

Further proposals

The ACTU is also calling for:

  • in the case of insolvencies, related corporations to pay entitlements;
  • changes to the general Employee Entitlement and Redundancy scheme to cover non-payment of entitlements;
  • funding of the Office of Workplace Services in the Department of Employment and Workplace Relations to enforce awards, agreements and laws; and
  • changes to the corporations Act to crack-down on phoenix companies.

For more information go to the ACTU website.

 

 

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