Cole report: Victoria

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Cole report: Victoria

The Cole Commission report says the Victorian building and construction industry is in urgent need of reform and cultural change.

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The Cole Commission report says the Victorian building and construction industry is in urgent need of reform and cultural change.
 
Problems facing Victoria
 
The Commission grouped the problems arising in Victoria under a number of major headings:
  • Deficiencies in the current regulatory system
  • CFMEU audits
  • Use of OHS as an industrial tool
  • Unlawful industrial action
  • Inappropriate devolution of management functions
  • Constraints on freedom of association
  • OHS
  • Unsafe workplaces
  • Inappropriate management or use of funds
The main points relating to these are noted below.
 
Deficiencies in the current regulatory system
 
Union officials misuse their rights of entry and OHS in order to advance industrial demands.
 
CFMEU audits
 
CFMEU officials generally rely on state inquiry powers instead of the more prescriptive rights of entry under the Workplace Relations Act.
 
Employers are routinely insulted, abused, harassed and intimidated while undergoing the document inspection. The abuse often extends to pressing employers to make corrective payments to employees.
 
There is a complete disregard for the rule of law during right of entry visits to identify shortfalls in employer payments of employee benefits.
 
Reforms
 
Employers are not aware of their rights regarding CFMEU audits.
 
Use of OHS as an industrial tool
 
Many union officials use OHS as an industrial tool, threatening to disrupt work and close down sites.
 
Unlawful industrial action
 
Unlawful industrial action is common and widespread on Victorian building sites that are regarded as ‘union sites’. 
 
For example, violence and threats of violence in support of industrial demands, breaches of orders made by courts and the AIRC, breaches of provisions of the Workplace Relations Act and breaches of the Trade Practices Act.
 
Inappropriate devolution of management functions
 
The capacity of contractors to manage projects on ‘union sites’ in Victoria is constrained to a far greater extent than is required to comply with legal requirements. 
 
Too frequently they are prevented from managing by unlawful industrial action or threats of such action by union organisers and site delegates. Refusals to work, or work as directed, are commonplace.
 
Union officials refuse subcontractors access to sites. Secondary boycotts are imposed in support of industrial demands being made elsewhere in the industry. Green bans are imposed in support of protest campaigns. 
 
Managers regard themselves as powerless to respond to such conduct. The practical result is that, to a significant degree, management and control of projects is surrendered to the union organisers and delegates who know that union members will comply with.
 
Constraints on freedom of association
 
There is evidence of unions demanding, and succeeding in their demands, that workers must become union members. Despite repeated requests, no union official who gave evidence to the Commission during its Victorian sittings was able to identify a single site in or near the CBD in Melbourne on which there could be found a worker who was not a member of a union.
 
OHS
 
It is clear that complicated contractual arrangements on building sites sometimes make it difficult to determine exactly where responsibility for OHS lies. 
 
The Victorian legislation has overcome this problem somewhat, as it has widened the definition of employer to include sub-contractors, and has also provided that the obligations of employers in relation to OHS may extend to non-employees in certain situations.
 
Unsafe workplaces
 
More fatalities are suffered on building sites in Victoria than in any state other than NSW. These figures support the repeated claims by Victorian union leaders that a great deal more needs to be done to secure the safety of building workers in this state.
 
Inappropriate management or use of funds
 
Those employed in the industry were able to obtain access to their initial redundancy payment of (maximum) $3100. The evidence established that there was a practice in the industry of drawing redundancy payments whenever money was needed by a worker urgently, be it for a car, building extensions at home, school fees and the like.
 
There is also evidence of income protection insurance rorting.
 
Major findings
 
The major findings are summarised as follows:
  • widespread disregard of and breach of the enterprise bargaining provisions of the Workplace Relations Act 1996;
  • widespread departure from proper standards of OHS;
  • widespread requirement by head contractors of sub-contractors to have union endorsed enterprise bargaining agreements before being permitted to commence work on major projects, especially in the CBD;
  • widespread requirement for employees of sub-contractors to become members of unions in association with their employer obtaining a union endorsed enterprise bargaining agreement;
  • widespread disregard of the terms of enterprise bargaining agreements once entered into;
  • widespread application of and surrender to inappropriate industrial pressure;
  • widespread use of OHS as an industrial tool;
  • unlawful strikes and threats of unlawful strikes;
  • threatening and intimidatory conduct;
  • underpayment of employees’ entitlements;
  • disregard of contractual obligations;
  • the widespread imposition of restrictive practices flowing from pattern bargaining;
  • disregard of, or breach of, the right of entry provisions of the Workplace Relations Act 1996 by union officials;
  • disregard of Federal and State Codes of Practice and Guidelines in the building and construction industry; and
  • a culture of disregard for the law (including orders of the AIRC and the Victorian Supreme Court), and the rule of law, especially by officials and members of the CFMEU.
The Commissioner also identified a number of categories of conduct that he regarded as inappropriate. He considered such conduct to be illegal in some circumstances but not others, or not at present illegal but is recommending that it should be made illegal or at least discouraged.
 
The following is a list of inappropriate conduct that is common in the Victorian construction industry:
  • head contractors requiring sub-contractors to have union endorsed enterprise bargaining agreements before being permitted to commence work on major projects;
  • union officials requiring that sub-contractors have union endorsed enterprise bargaining agreements before being permitted to commence work on major projects;
  • union officials requiring employees of sub-contractors to become members of unions (often in association with a demand that their employer obtain a union endorsed enterprise bargaining agreement) in each case before being permitted to commence work on major projects;
  • application of industrial pressure by unions, their officials and their members;
  • the tendency of employers, when confronted by industrial action or inappropriate industrial pressure by unions, to seek a ‘commercial solution’ in order to avoid further action;
  • use of OHS as an industrial tool;
  • head contractors and sub-contractors making inappropriate payments to unions or union nominated funds because of demands by union officials;
  • disregard by senior union officials of unlawful or inappropriate acts by inferior union officials;
  • reluctance of employers to use available legal remedies to obtain damages and other relief for unlawful industrial action;
  • departure from proper standards of OHS;
  • certification of enterprise bargaining agreements where applications for certification were deficient;
  • the terms of inclement weather procedures in certified agreements frequently being given unintended or untenable interpretations;
  • the willingness of union officials to use foul and abusive language to employers during audits, to explicitly and implicitly threaten employers during audits, and to misrepresent positions during audits;
  • the failure of union officials or unions to account to employers for monies paid to a union following book audits;
  • unions requiring sub-contractors or head contractors to hire particular job delegates or safety officers, with the result that the subcontractors or head contractors were obliged to employ persons they did not wish to employ;
  • the practice of building employers in Victoria of paying the wages of shop stewards who spend the majority of their time on union business;
  • inappropriate union interference in retrenchment decisions;
  • union officials’ inappropriate interference with work methods for no justifiable reason;
  • the desire of union officials in Victoria to control, and be seen to control, many aspects of the day-to-day operations of central business district sites;
  • the assumption by union officials that the public expression by an employer of opinions with which they disagree warrants the taking of industrial action against the employer;
  • the assumption by union officials of the role of debt-collectors on behalf of its members thereby by-passing the lawful procedures being pursued in the course of a company liquidation;
  • the willingness of union officials to use the offer of payment of money collected on behalf of members as a means of inducing the members to pay membership fees;
  • the preparedness of a State Government not to award tenders to a contractor, notwithstanding that it provided the lowest tender price, was capable of performing the required work satisfactorily, met all relevant criteria, and was independently assessed as the preferred tenderer, because that contractor did not have an EBA with a particular union, and because of fears of possible disruptions, delays and expenses, which might be caused by that union, if the tender was awarded to that contractor;
  • the power of a union to influence the conduct of a Government tender process;
  • the instigation by a union of protected action purportedly on behalf of a sole employee who was not a union member, and who did not wish to have a union involved in his relationship with his employer;
  • the manner in which unlawful industrial action can force contractors to cease doing business in Victoria or to determine not to enter the Victorian market thereby depriving the State of both business income and employment opportunities;
  • the disregard of the wishes of employees regarding their employment terms and conditions;
  • loss and delay occasioned by demarcation issues;
  • the susceptibility of the Victorian WorkCover Authority to pressure from officials of a union;
  • the covert commitment by the Victorian Government of public monies to assist a private company to overcome the effects of unlawful and inappropriate industrial action by the unions;
  • lack of supervision by the Victorian Government of the performance of contractual obligations by its contractors;
  • the willingness of an industrial relations consultant to the Victorian Government to arrange for payments to be made to a contractor for services that were not provided;
  • the practice of union officials in Victoria of demanding that employers make contributions to union funds and linking a positive response to industrial peace;
  • the practice of union officials in Victoria of imposing informal ‘fines’ on employers whom they consider have contravened the terms of an industrial instrument the abdication of employer responsibility for the conduct of site inductions;
  • the willingness of unions, to accept moneys on account of membership on behalf of persons who do not wish to become members; and do not know they are being enrolled as members;
  • the making of a demand by a union organiser for payment of money by a head contractor purportedly in respect of union membership of a sub-contractor’s employees in circumstances where at least nominally, such employees were members; and the sum demanded was not a sum truly related to such membership fees;
  • the manner and extent to which the major contractors and unions each disregard principles of freedom of association, and the right of workers to work without being a member of a union if the worker so choose; and
  • the tacit acceptance by employers that dispute resolution clauses in industrial instruments cannot be invoked in the event that industrial disputation arises on a building site.  
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