Earthmoving Industry Insight, Opinion

CCF QLD: Is the Fair Work Bill actually fair?

With amended labour legislation being considered, the consequences could be significant for the industry

Australia’s civil construction industry is facing proposed changes that could reshape the nation’s workforce. The Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 (Cth) has been introduced, and the Civil Contractors Federation Australia (CCF) is stepping forward to voice its concerns and advocate for a balanced approach.

While it aimed to address labour hire issues in specific sectors, the proposed Bill seems overly comprehensive, casting its net wider than intended. This risks hindering workforce management, driving up costs and undermining productivity.

Alex Robson, deputy chair of the Productivity Commission, highlights Australia’s stagnant productivity rates. To boost real wages, increased competition and improved productivity are essential. The current system stifles worker mobility and competition, which is detrimental to productivity growth. The focus should shift towards competition between employers to secure workers, rather than labour bargaining.

The federal government has stated that regulated labour hire arrangement orders are only intended to ensure labour hire workers are paid the same as employees on enterprise agreements. The federal government is selling this legislation as closing a loophole. However, the federal government has provided little evidence of this so-called loophole.

The explanatory memorandum states the intention is “protecting bargained wages in enterprise agreements from being undercut by the use of labour hire workers who are paid less than those minimum rates”.

The legislation is far broader, applying to any situation where “an employer supplies or will supply, either directly or indirectly, one or more employees of the employer to a regulated host to perform work for the regulated host; and a covered employment instrument that applies to the regulated host would apply to the employees if the regulated host were to employ the employees to perform work of that kind”.

There appears to be no exemption in the legislation for employees working for subcontractors, who are working for a head contractor, who is a ‘regulated host’. The nature of the contracting arrangement is merely a factor that can be considered. In making its determination, the Fair Work Commission may consider “whether the performance of the work is or will be wholly or principally for the provision of a service, rather than the supply of labour, to the regulated host”.

For the construction sector, this ‘loophole’ could have massive repercussions if skilfully exploited by unions, which could try to push for ‘on hire’ employees of subcontractors on a construction project to be paid at the same rate as the head contractor’s enterprise agreement. Furthermore, as subcontractors routinely work across multiple major projects at the same time, unions would choose to apply for an order with the regulated host that has the most generous enterprise agreement in the region.

It is concerning that the legislation would give unions the unrestricted right to apply for orders in regard to any employee they are entitled to represent. With each order granted, precedence could be re-established and the reach of the legislation would cover the whole industry through policy creep, intentionally or not.

The campaigns being run by a number of construction industry bodies has been slammed as fear mongering by the federal government. It would seem they are more on the money than many realise.

It is highly unrealistic to suggest that, because a long-term and highly productive employee is on a certain pay rate, that the same rate should apply to a temporary labour hire employee.

For example, a skilled permanent excavator operator will be much more productive than a labour hire worker who is less skilled, but whose services are necessary to cope with a temporary high workload. Under the proposed legislation, an employer would be forced to pay both excavator operators the same hourly rate.

In addition, the Bill contains a number of other concerning elements such as:

  •  redefining casual employment and employment
  •  dealing with unfair contract terms within the Fair Work Commission.
  •  the broad interpretation of “reasonably communicate”, potentially infringing on the right to freedom of association.

The civil construction industry is a vital contributor to Australia’s economy and well-being. A ‘one-size-fits-all’ approach to industrial relations management is not viable. The Bill must strike a balance that preserves productivity, protects workers, and fosters a collaborative, consultative and fair industrial relations system, ultimately benefiting all Australians.

If this is not possible the civil construction industry must be carved out of the Bill.

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