Rapport où le comité demande à être informé de l’évolution de la situation - Rapport No. 388, Mars 2019

1. 109. The complaint is contained in a communication dated 28 April 2017, from the Australian Council of Trade Unions (ACTU). In a communication dated 30 May 2017, Building and Wood Workers’ International (BWI) associated itself to the complaint.
2. 110. The Government submitted its observations in communications dated 18 May and 5 October 2018, and 3 February 2019.
3. 111. Australia has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainant’s allegations

1. 112. In its communication dated 28 April 2017, ACTU indicates that the complaint concerns changes introduced by the Government in 2016 to the industrial laws applying to the Australian construction industry. The complainant refers in particular to the Building and Construction Industry (Improving Productivity) Act 2016 (hereafter the BCIIP Act), which came into effect on 1 December 2016, and, the Code for the Tendering and Performance of Building Work 2016 (hereafter the Code 2016) which the Minister for Small and Family Business, the Workplace and Deregulation (hereafter the Minister), issued immediately following the passage of the BCIIP Act and which came into effect on 2 December 2016. The complainant alleges that the Federal Government of Australia has promoted the BCIIP Act and the Code 2016 as a “package” of industrial “reforms” necessary to improve the productivity and efficiency of the Australian construction industry, while a very recent report concluded that the industry was already highly productive by international standards.
2. 113. The complainant indicates that among other things, the BCIIP re-establishes a statutory agency known as the Australian Building and Construction Commissioner (hereafter ABCC), that was first created through the enactment of the Building and Construction Industry Improvement Act 2005 (BCII Act). The complainant recalls that the first ABCC legislation was the object of the Committee on the Freedom of Association (CFA), Case No. 2326 and that for several years afterwards the Committee of Experts on the Application of Conventions and Recommendations (CEACR) made numerous adverse findings in relation to laws pertaining to ABCC and commented on their inconsistency with Australia’s obligations under ILO fundamental Conventions. The complainant alleges that since the establishment of the original ABCC in 2005, the focus of its operations has been on investigating and prosecuting trade unions, union officials and individual workers for breaches of industrial laws and it has played no real role in the legal enforcement of the conditions of work for workers. The ACTU further recalls that following the election of a new Government in 2007, the BCII Act was eventually amended and renamed the Fair Work (Building Industry) Act 2012. Under the new Act the former ABCC was renamed the Fair Work Building Industry Inspectorate, the separate legal restrictions and higher penalties for unions and workers in the construction industry were removed and various statutory safeguards were introduced to ameliorate the most oppressive aspects of the coercive investigatory powers held by the new Inspectorate. The Federal Government procurement rules were also codified for the first time as a legislative instrument in the Building Code 2013. The complainant alleges, however, that since the re-election of the Liberal-National Party Coalition Government in 2013, the Government campaigned vigorously for the passage of legislation in similar terms to the 2005 BCII Act, which resulted in the adoption of the BCIIP Act and the Code 2016. The complainant adds that the BCIIP Act significantly increases monetary penalties for those organizing and engaging in what is termed “unlawful industrial action” and provides the legal basis for the rules relating to the procurement of goods and services in the construction industry by the Federal Government.
3. 114. As regards the allegations that the BCIIP Act significantly increases the maximum penalties applicable to unlawful industrial action, coercion and the new restriction on “unlawful picketing”, the complainant specifies that Grade A civil penalties, per contravention, have been increased to 180,000 Australian dollars (AUD) for trade unions and AUD36,000 for individuals, while the maximum penalties applying in other industries to industrial action taken within the nominal term of a collective agreement under the Fair Work Act (FWA) 2009 is AUD10,800. The ACTU adds that the only form of industrial action that is exempt from the reach of BCIIP Act penalties is “protected action” in pursuit of a collective bargaining agreement. However, in the construction industry, the scope of what constitutes “protected action” is further reduced by the introduction of the concept of “protected persons” in section 8 of the BCIIP Act.
4. 115. Furthermore, the complainant alleges that the BCIIP Act introduces a prohibition, unique to the construction industry, of “unlawful picketing”. An unlawful picket includes any industrially motivated action that directly restricts persons from accessing or leaving a building site, or has that purpose and the mere organizing of such action is also deemed to be unlawful, even before persons physically assemble. According to the complainant, it follows from the provisions of the law that for picketing to be unlawful, it does not actually have to restrict or prevent in any material way access or egress to a building site. Conduct such as peaceful assemblies and the conveying of information to persons entering or leaving a building site would fall under these provisions. Even the Statement of Compatibility with Human Rights which was annexed to the Explanatory Memorandum for the Bill conceded that “the right to freedom of peaceful assembly is limited by the prohibition on unlawful picketing that is contained in section 47 of the Bill”.
5. 116. The complainant further indicates that Chapter 6, Part 2, Division 1 of the BCIIP Act introduces another range of civil penalty measures that largely apply to the act of coercing a party to obtain a particular industrial outcome. It alleges that the relevant sections replicate those of the FWA 2009 that apply to all industries including construction and the only effect of their reproduction in the BCIIP Act is to apply higher penalties to the construction industry parties than those applicable elsewhere for the same conduct. The complainant considers this difference in penalties to be inconsistent with the most basic principle of equality before the law.
6. 117. The last point raised by the complainant with regard to the BCIIP Act concerns the coercive investigative powers for the new ABCC set out in Chapter 7, Part 2 of the Act. The complainant alleges that these powers enable the ABCC to issue notices that compel a recipient to attend and answer questions relating to an investigation under oath and/or provide information or documents. The complainant alleges that section 102 of the BCIIP Act expressly overrides the common law privilege against self-incrimination in this context, and section 62 makes the failure to comply with ABCC notices a criminal offence attracting a penalty for individuals of up to six months imprisonment and/or a fine of AUD5,400. Finally section 63 repeals an earlier provision that allowed an attendee to claim expenses for legal representation during a compulsory interrogation.
7. 118. With regard to Code 2016, the complainant explains that this piece of legislation sets out the requirements that must be met by contractors in order to be eligible to tender for and be awarded construction work on projects funded by the Federal Government. The complainant alleges that the Code 2016 imposes restrictions on the content of collective bargaining agreements that would apply in addition to the limitations in the FWA 2009, and that severely impede the capacity of workers to negotiate terms favourable to them in enterprise bargaining agreements. Section 11 of the Code 2016 lists a range of clauses that constitute prohibited agreement content. The complainant states that the most far-reaching of these restrictions is contained in section 11(1)(a) which prohibits any clause in an agreement which imposes or purports to impose limits on the right of a code covered entity (employer) “to manage its business or to improve productivity”. More specifically, the complainant refers to the examples of prohibited clauses mentioned in its submission dated 19 February 2016 to the Senate Education and Employment Committee that it has annexed to the complaint. These examples include clauses that require that employees of businesses to whom work is contracted out to be paid no less than the rates and conditions of permanent employees; clauses that limit the “cashing-out” of entitlements through the use of “rolled-up” rates of pay, and clauses that try to overcome the prohibitions in section 11 by rendering the offending clauses inoperative.
8. 119. The ACTU further refers to a number of restrictions imposed by the Code 2016 with regard to the content of collective agreements that it alleges are inconsistent with the right to freedom of association and the right to organize as guaranteed in Convention No. 87. In this regard, the complainant indicates that clauses that allow union representatives to address employees about the benefits of union membership or to promote the benefits of becoming a union member are prohibited as inconsistent with the Code 2016. Furthermore, section 11(3)(k) of the Code does not permit clauses that give trade unions the capacity to monitor collective agreements, for example, for compliance purposes. Finally section 11(3)(d) and (e) prohibit clauses that require an employer to consult with a trade union representative as to the source, number or type of employees to be engaged or the engagement of subcontractors. The complainant indicates that according to section 22 of the Code 2016, the arbiter of whether agreement clauses are inconsistent with the law is the ABCC, a body that, the complainant alleges, has a demonstrable record of hostility to workers’ interests.
9. 120. The complainant further alleges that the Code 2016 limits the level at which collective bargaining can be undertaken as section 10 prohibits bargaining for, making or implementing unregistered written agreements which can include site or project agreements, but explicitly excludes common law individual contracts from this prohibition. The complainant alleges that through this provision, the Code 2016 promotes individual contracts but prevents bargaining occurring on a collective basis at the level determined by the parties themselves and considers that these measures are at odds with the obligation of the Government to promote voluntary bargaining in accordance with ILO Convention No. 98.
10. 121. The ACTU further alleges that the Code 2016 includes provisions that inhibit freedom of association and unduly interfere with the right of unions to organize and effectively represent the industrial interests of their members. In this regard, the complainant refers to section 13(2)(p) of the Code according to which workers that are delegates or representatives of a trade union are not permitted to undertake or administer site induction processes. In the same line, it further refers to section 14 of the Code that restricts the workers’ access to union representation as its application entails the inability of unions to enter workplaces at the invitation of the employer.

B. The Government’s reply

1. 122. In its communication dated 18 May 2018, the Government provides detailed replies to the complainants’ allegations. The Government emphasizes that it takes Australia’s international obligations very seriously and the right to freedom of association and collective bargaining were considered in drafting the BCIIP Act and the Code 2016. It further affirms that three Royal Commissions and numerous Federal Court decisions against the building and construction union support the need for specific regulation of the building and construction industry, including the need for higher penalties for breaches of workplace relations laws as well as a dedicated workplace relations regulator. Compelling evidence of the need for reform was found in the final reports of both the Cole Royal Commission (2003) and the Heydon Royal Commission (2015) where criminal, unlawful conduct including breaches of the relevant workplace relations and work health and safety legislation, corrupt payments, physical and verbal violence, threats, intimidation and abuse of the right of entry permits were disclosed. The Government cites several cases concerning the Construction, Forestry, Mining and Energy Union (CFMEU) where courts found evidence of disregard for the law within the industry and adds that employers have also been found to have behaved unlawfully, including by forcing subcontractors or individual employees to engage with unions in order to gain employment. It further indicates that cartel arrangements exist between large construction companies and construction unions, which have sought to supress smaller construction firms and exclude them from major projects, unless they submit to the demands of the cartel. The Government considers that given that the industry comprises over 300,000 small businesses, such behaviour is particularly concerning and affirms that it enacted the BCIIP Act to address persistent unlawful behaviour.
2. 123. With regard to the process of adoption of the new legislative texts, the Government indicates that it consulted employers’ and workers’ organizations of the industry on the drafts and the feedback from these consultations resulted in amendments to the Code 2016. The Government indicates that the BCIIP Act aims at providing an improved workplace relations framework for building work in order to ensure that this work is carried out fairly, efficiently and productively, without distinction between the interests of building industry participants, and for the benefit of the Australian economy as a whole. It recalls that this industry is Australia’s second largest and accounts for 8.1 per cent of gross domestic product and around 9 per cent of employment. Regarding the Code 2016, the Government indicates that it sets out the expected standards of conduct for all building contractors and industry participants that undertake Commonwealth funded building work. The Code requires contractors to comply with the law, including workplace relations laws dealing with pay and entitlements, security of payments and work health and safety.
3. 124. The Government provides a description of the role of the ABCC as the building and construction industry specific regulator. It refutes the complainant’s allegation that the ABCC focuses on investigating and prosecuting unions, union officials, and individual workers. The Government indicates in this regard that since the re-establishment of the ABCC in December 2016, until the end of February 2018, there have been 111 complaints made against employers, 76 of which proceeded to investigation and 132 complaints against unions or union representatives, 63 of which proceeded to investigation. The ABCC forms part of a system of labour inspection and is statutorily required to perform its functions without distinction between the interests of unions, employers, or contractors. The Fair Work Ombudsman, Australia’s primary workplace regulator for all sectors and industries, addresses initial enquiries from workers in the building and construction industry in relation to wages and entitlements, while matters in the industry that require investigation or other further action are referred to the ABCC. The Government refers to section 16 of the BCIIP Act concerning the functions of the ABCC. Section 16(3) requires the ABCC to perform his or her functions in relation to relevant provisions of the FWA, including wages and entitlements, right of entry, industrial action and general protections provisions. The Government further emphasizes that the BCIIP requires the ABCC not to make distinctions between the interests of building industry participants, and to ensure that the policies and procedures adopted and the resources allocated for protecting and enforcing rights and obligations arising under relevant laws are applied in a reasonable and proportionate manner. The Government indicates that the activities of the ABCC include responding to all inquiries and complaints related to wage and entitlement issues, as well as proactive compliance activities such as audits. Both complaints and audits may entail investigations. According to the Government, the fall in industrial disputes in building and construction industry throughout its time of operation (2005–12 and 2016–18) is evidence of the ABCC’s effectiveness. To the contrary, when the ABCC was abolished and replaced by Fair Work Building and Construction - June 2012 to December 2016 - disputes multiplied and returned to five times the average compared to all industries.
4. 125. With regard to the ABCC’s “compulsory examination powers” – called “coercive investigative powers” in the complaint – the Government indicates that the Cole Royal Commission (2003) recommended that such powers be granted to the industry regulator, as without them, the industry’s well-documented culture of intimidation would prevent reporting of unlawful behaviour. The powers are necessary to ensure compliance with Australia’s workplace relations laws and apply equally to employers and unions. The Government indicates that in practice, they have been overwhelmingly used to deal with employers and provides the numbers of “compulsory examinations” conducted each year between 2014 and 2017 in support of this statement. The Government further states that in line with the precept embodied in Article 8 of Convention No. 87, the ABCC enforces the BCIIP Act. It adds that in its view, the obligation of non-interference contained in Article 2 of Convention No. 98 does not preclude state parties from establishing investigative bodies with coercive powers for the purposes of regulating and investigating the conduct of their workers’ and employers’ organizations. The Government further describes the process of issuing examination notices. The ABCC may apply to a presidential member of the Administrative Appeals Tribunal – who is nominated by the Minister – and request the issuance of an examination notice if he/she has sound reasons to believe that a person has information or documents or is capable of giving evidence relevant to an investigation. Once the notice is issued the ABCC may give it to the person requiring them to give information, produce documents or appear before the ABCC. The Government confirms that the BCIIP Act excludes reliance on the common law privilege against self-incrimination to refuse to provide information under an examination notice, but states that the Act recognizes the seriousness of abrogating this privilege by providing both use and derivative use immunity in relation to the information obtained in these circumstances. For this reason, the information provided cannot be used against the person in most criminal or civil proceedings and the powers are rarely used to examine a person suspected of contravening the law. Instead, the powers are very often invoked at the request of the victim or witness themselves to avoid reprisals for having cooperated with the ABCC.
5. 126. With regard to the allegation that the BCIIP Act has introduced penalties, applicable to unlawful industrial action in the construction industry, that are significantly higher than those applicable to similar acts in other industries, the Government indicates that the penalties applicable under FWA to all industries were inadequate to deter unlawful behaviour in the building and construction industry. This is reflected in the evidence received by the Cole Royal Commission (2003) showing that there was a view amongst building industry participants that breaking the law did not have any real consequences. The Government therefore indicates that high penalty levels are a response to the significant and persistent lawlessness in the industry and quotes in this regard an excerpt of the final report of Justice Heydon, Commissioner, Royal Commission into Trade Union Governance and Corruption. The excerpt reads: “… the present penalties are an ineffective deterrent to unlawful conduct on the part of the construction unions, and judicial officers have noted that the CFMEU appear to regard financial penalties as simply a business cost like any other. That suggests that higher maximum penalties could not be considered disproportionate to the harm caused by unlawful industrial action and coercion, particularly when the selection of particular penalties from case to case are subject to the usual judicial discretion.” The Government indicates that penalty levels under BCIIP Act apply equally to all building industry participants, including employers. It also states that since the establishment of the ABCC in 2005, penalties of over A$14.4 million have been awarded against the CFMEU for breaches of workplace relations laws in cases brought by the ABCC and its predecessors. The Government finally quotes several recent court decisions stating that penalties need to act as a proper deterrent to address persistent unlawful behaviour. In particular, the Government refers to a ruling of the High Court of Australia dated 14 February 2018, confirming that an individual union official can be required to pay their own fines, holding that “… if a penalty is devoid of sting or burden, it may not have much, if any, specific or general deterrent effect … ”.
6. 127. With regard to the introduction of prohibition of unlawful picketing in the BCIIP Act, the Government indicates that this prohibition is necessary in the interests of public safety, public order, and the protection of the rights and freedoms of others. It emphasizes that this prohibition does not affect in itself the engaging in or taking of protected industrial action under the FWA. The Government indicates that section 47 of the BCIIP Act prohibits organizing or engaging in action that has the purpose of preventing or restricting a person from accessing or leaving a building or ancillary site. The provision also prohibits action that directly prevents or restricts a person from accessing or leaving the site, or would reasonably be expected to intimidate a person accessing or leaving the site. It further specifies that the prohibition is limited to picketing action that is motivated by an industrial purpose or is otherwise unlawful and pursues the legitimate aim of prohibiting picketing that is designed to cause economic loss to building industry participants. The Government recalls that the Heydon Royal Commission had found picketing is more frequent in the building industry as compared to other industries and has a disproportionately significant impact on workers and their employers; hence, it should be treated differently in the context of the building industry. According to the Government, section 47 of the BCIIP Act seeks to address particular behaviour, such as where persons who are not employees of an affected site nevertheless seek to disrupt work at that site. As an example, the Government refers to the blockading of a Melbourne site in 2012 by members of the CFMEU that became violent and resulted in serious disruptions to the community. The Government finally indicates that section 47 of the BCIIP Act provides access to a quick statutory remedy for affected persons and allows the ABCC to make an application to a court against parties involved in unlawful picketing. The Government expects that this will act as a disincentive and will change the culture of the industry for the better.
7. 128. With regard to the alleged restrictions to collective bargaining and the content of collective agreements under the Code 2016, the Government affirms that they balance the right of employees to negotiate their terms and conditions of employment with the need to ensure that employers, particularly small subcontractors, are able to manage their businesses efficiently and productively. The Government indicates that the Code 2016 prevents clauses that would limit the ability of workers and their employers to determine their day-to-day work arrangements. It expresses concern that restrictive clauses in enterprise agreements, which are often forced onto subcontractors by head contractors that have made agreements with unions, are contributing to costs and delays of projects within the building and construction industry. The Government quotes a Business Council of Australia report published in June 2012 in support of the idea that Australia is a high cost, low productivity environment for building infrastructure projects. It enumerates a number of restrictive clauses commonly found in building and construction industry enterprise agreements including “jump up” clauses which provide that subcontractors cannot be engaged unless they apply wages and conditions at least as favourable as the enterprise agreement that applies to the head contractor. The Government indicates that the direct effect of this clause, which was found in 70 per cent of a random sample of construction agreements studied by the Productivity Commission, is an increase in labour costs and therefore the overall costs of a project. It adds that the common restrictive clauses substantially inhibit the right of subcontractors to freely engage in collective bargaining as the acceptance of deals done by head contractors and unions is a condition of being able to perform work on certain types of building projects. The Government finally indicates that the limitation of bargaining clauses in the Code 2016 only applies to builders who wish to undertake Commonwealth funded building work and rejects the complainant’s allegation that the ABCC is biased against unions in issuing determinations as to whether certain clauses are permissible under the Code 2016.
8. 129. With regard to the alleged limits imposed by the Code 2016 on the level of collective bargaining, the Government indicates that under section 59 of the BCIIP Act, project agreements are not enforceable. The Government once again invokes the fact that many subcontractors in the industry are forced to accept these arrangements as a condition to work on certain types of projects as the ground for this provision. With regard to the relevant provisions of the Code 2016, the Government explains that they do not encourage individual contracts. Instead the Code 2016 prohibits site and project agreements to deter “side deals”, namely informal agreements and other arrangements that may be made by building contractors and unions seeking to circumvent the Code’s prohibited content provisions for enterprise agreements and to secure standard employment conditions for groups of building employees that have separate and diverse enterprise agreements. According to the Government, the Code 2016 requires that above award terms and conditions of employment be dealt with in enterprise agreements (or individual flexibility agreements) made under the FWA or in common law agreements between employers and individual employees. The Code discourages the use of agreements outside this framework in order to ensure transparency and guarantee oversight by the Fair Work Commission, Australia’s independent national workplace relations tribunal. Finally, the Government emphasizes that the clear intent of this prohibition is to protect genuine collective bargaining in the building and construction industry in line with Australia’s national circumstances.
9. 130. With regard to the allegation that various provisions in the Code 2016 inhibit freedom of association and interfere with the rights of unions to organize and represent their members, the Government indicates that the measures in question are reasonable and necessary to protect the safety and rights of all workers. They also ensure that site processes have the appropriate oversight. The Government further indicates that in line with the ILO supervisory mechanisms’ finding that it is a matter for each member State to decide whether it is appropriate to guarantee the right not to join a union, part 3–1 of the FWA clearly guarantees this right within Australia. However, this right is not always respected within the building and construction industry where there is evidence that some sites are regarded as “union sites” and on those sites all workers are expected to be union members. In view of this evidence, the Government considers that it is necessary to protect the rights and freedoms of all employees through specific legal provisions.
10. 131. With regard to the alleged restriction of the right of entry of union representatives into building sites, the Government indicates that the Code 2016 simply requires that right of entry be exercised in line with the provisions of the FWA or a relevant work health and safety law. It explains that subject to certain conditions, right of entry can be exercised to investigate suspected contraventions of the FWA or a term of a fair work instrument. It can also be used for the purpose of holding discussions with employees; to exercise a state or territory occupational health and safety right; to inquire into a suspected contravention of the Work Health and Safety Act, 2011, or to consult with or provide advice about work health and safety matters to workers. The Government affirms that subjecting the right of entry to this legal framework is reasonable, necessary and proportionate. To support this point it cites evidence that certain union officials abuse the right of entry provisions by entering a site to disrupt work and cause economic loss to businesses for reasons that are not related to legitimate health and safety concerns or industrial relations matters.
11. 132. With regard to the prohibition of collective agreement clauses that require employers to consult with unions on the source, number or type of employees to be engaged, or the engagement of subcontractors, the Government indicates that given the circumstances within the building and construction industry, this prohibition is necessary to enable effective and productive business management. It further indicates that many enterprise agreements contain clauses that in some way restrict an employer’s engagement of subcontractors, including by requiring consultation with unions. These clauses are most prevalent in the building and construction industry, where, as of 30 September 2017, 19.7 per cent of the enterprise agreements contained this type of clause, which amounts to 62.4 per cent of the use of these clauses nationwide. The Government considers that the restrictions enshrined in these clauses have led to coercion being applied to employers by unions to not engage a subcontractor unless the subcontractor has a union enterprise agreement. According to the Government the clauses give unions disproportionate power on building sites, limit the right of the employer to manage and improve its business, and prevent an employer from determining with its workers how work is performed and by whom. In a judgment of the Federal Circuit Court it is established that a CFMEU official told the workers that:
    • “This is a union job site and everyone who wants to work on the site must be in the union … if you don’t want to join … I will … request that you be replaced with workers who are more team players … the CFMEU got [the subcontractor] this job by putting their name forward out of a list of contractors. Now [the subcontractor] has got workers onsite who aren’t in the union and [the subcontractor] knew that this was a union site”.
12. The Government states that although this judgment did not specifically refer to the consultation clause in the enterprise agreement, the language used by the union official strongly suggests that the union took advantage of the clause to give preference to subcontractors that employ union members. The Government further emphasizes that although the Code 2016 prohibits the inclusion of clauses requiring consultation on specified matters, there is no actual prohibition on unions participating in consultations on the source, number or type of employees to be engaged, or the engagement of subcontractors.
13. 133. As to the prohibition of the collective agreement clauses that give trade unions the capacity to monitor compliance with those agreements, the Government indicates that the workplace relations regulator (in this case the ABCC) and the courts are the appropriate bodies to monitor compliance with enterprise bodies.
14. 134. With regard to the complainant’s allegation that the provisions of the Code 2016 that exclude union delegates or representatives from site induction processes are inconsistent with freedom of association and the right to organize, the Government indicates that it respects the right of employees to join or not to join a union. According to the Government, these provisions are only intended to prevent undue pressure to join a union on employees in the early stages of a new job or project, when they are particularly vulnerable to such pressure. Unions can exercise the right to enter to promote union membership at other times consistent with right of entry provisions in the FWA. The provisions of the Code 2016 are only directed to prevent situations where workers are barred from a site because they are not union members. The Government contends that forcing or pressuring workers to join a union does not uphold freedom of association. It considers that given the culture that exists in the industry, which can lead to employees being given misleading information about the need to join a union in order to be allowed to work, these provisions are necessary. The Government indicates that the courts have heard many cases where union officials, as part of induction processes, prevented workers who were not members of the union from working on building sites. In this regard, the Government provides two examples. The first example concerned a case in which a union official, conducting induction at a building site, would not allow workers on site until their membership fees were brought up to date. The second example concerned a case where a union official told two newly inducted workers who were not union members that they were not allowed on site. Furthermore, the Government considers that the responsibility for undertaking induction processes is a non-delegable duty that rests with whoever manages the site, such as the head contractor or the employer.
15. 135. In its communication of 5 October 2018, the Government forwards the observations of the Australian Chamber of Commerce and Industry (ACCI) at their request. The ACCI indicates that it has a very strong coverage throughout Australia’s building and construction industry and in particular the on-site construction sector to which the work of the ABCC is directly relevant. The ACCI provides its detailed views on the allegations raised by the complainant, as well as what it considers to be essential background information on the basis on which the ABCC was legislated in 2016.
16. 136. The ACCI maintains that the complainant on the whole does not make any case for its allegation that the BCIIP Act is inconsistent with equality before the law but proceeds to address the specific allegations that higher penalties are imposed under the Act, that it provides a narrow understanding of protected action and a broad application of the prohibition on unlawful picketing.
17. 137. As regards the provision for higher penalties, the ACCI maintains that given the culture of lawlessness in construction unions uncovered by multiple royal commissions and Australian courts over the years, higher penalties are necessary in order to constitute an effective deterrent. They refer in particular to the 2015 Royal Commission into Trade Union Governance and Corruption whose interim report they state has suggested that case studies associated with one of the powerful unions in the sector “raise fundamental issues about the regulation of the building and construction industry and the culture of wilful defiance of the law”, while the final report refers to widespread and deep-seated misconduct by unions and officials. The ACCI refers to subsequent cases decided against a union in the sector which it maintains are symptomatic of the closed shop practices which see subcontractors and small businesses treated unfavourably or prevented from working on sites because they are not union members or won’t accede to union preferred arrangements. It contends that the FWA and tools available to the courts were insufficient in dealing with such unlawfulness and a stronger response was needed. The ACCI also recalls that the penalties in the Act are prescribed as maximum penalties and the courts act independently in determining the appropriate level and consideration of proportionality.
18. 138. As regards the allegations that there were excessive limitations on industrial action through inclusion of the notion of protected persons, the ACCI states that a protected right to take industrial action subject to reasonable limitations has formally existed since the introduction in 1993 of the Industrial Relations Reform Act. The ACCI also refers to the more recent adoption of the FWA and the conclusions of the CFA in Case No. 2698, which they state recommended the review of certain provisions but did not conclude that the Act was inconsistent with the principles of freedom of association. The ACCI observes that the BCIIP Act provisions differ from the FWA in that protected industrial action under the FWA will not be protected if it is engaged in concert with persons or is organized by persons who are not connected to bargaining for an enterprise agreement. In the view of the ACCI, the limitations on industrial action are reasonable, necessary and proportionate to legitimate aims as set out in the Explanatory Memorandum to the BCIIP Act and as is evident in the context of the behaviours and culture of the building and construction industry, which include the need to reinforce recognition of the right for all employees to be able to choose whether they wish to join or not to join an association.
19. 139. As regards the allegation relating to the prohibition on unlawful picketing, the ACCI notes with the interest that the ILO has said that the prohibition of strike pickets is justified only if the strike ceases to be peaceful. The ACCI observes that the CFA has distinguished peaceful picketing from picketing that is accompanied by violence or coercion of non-strikers in an attempt to interfere with their freedom of work. The provisions in the BCIIP Act take place in the context of an industry which will often involve actions that are not peaceful, where coercive conduct features and where attempts are made to restrict freedom of access to work for non-union and non-striking workers.
20. 140. As regards the level of collective bargaining, the ACCI asserts that the Code 2016 does not modify the requirements for the level at which collective bargaining can occur under the FWA, nor does it alter the definition of a single enterprise. Section 10 simply provides that side agreements cannot be used to provide for terms and conditions or restrictions that could not be included in an enterprise agreement. Moreover, looking at the practice, it can hardly be said that voluntary collective bargaining does not occur as 203 of 680 collective agreements approved in the September quarter 2017 come from the building and construction industry, while 4,200 agreements in force during that period represent 32.5 per cent of all collective agreements in force at that time in Australia.
21. 141. More generally, the ACCI asserts that the earlier case examined by the CFA in the 2000s in relation to the preceding ABCC legislation should be distinguished from the current case in a number of aspects, including: (1) the current ABCC Commissioner must, under the 2016 legislation, apply to the Administrative Appeals Tribunal (AAT) to obtain scope to compulsorily examine witnesses, obtain documents, etc.; (2) the Commissioner must now notify the Commonwealth Ombudsman of an issue of examination notice, which provides an additional level of scrutiny and protection; and (3) the Commissioner must ensure that the policies and procedures adopted and resources allocated are to be applied to the greatest extent possible in a reasonable and proportionate manner to each of the categories of building industry participants.
22. 142. According to the ACCI, further circumstances differentiate this case as the social partners were provided with significant and multiple opportunities for input on the legislation recreating the ABCC within the framework of Australia’s Committee on Industrial Legislation and directly to the legislators. Moreover, fundamental changes have been made since the earlier complaint which significantly and materially alter Australia’s workplace relations law and practice. It contends therefore that the conclusions of the earlier case are not relevant to the examination of the BCIIP Act.
23. 143. As regards the Code 2016, the ACCI emphasizes that its core function is to set minimum standards of employer conduct and expectations in the event the employer chooses to tender for government work but in no way regulates either employees or trade unions. The Code 2016 aims to promote an improved workplace relations framework and safe, healthy, fair, lawful and productive building sites for all building industry participants in a manner fully in line with the Labour Clauses (Public Contracts) Convention, 1949 (No. 94) and Recommendation (No. 84) (not ratified by Australia) but also irrelevant to the mandate of the CFA. The ACCI contests the allegation that the Code 2016 restricts the parties in their collective bargaining rights as demonstrated by the statistics cited above. Furthermore, the Code 2016 places obligations and liabilities on the employers and not directly on workers or trade unions and the sanction is a commercial rather than a criminal or pecuniary one. Finally, the ACCI contests the complainant’s allegations that the ABCC has a demonstrable record of hostility to workers’ interests, a claim that the ACCI contends is wholly unsubstantiated, while numerous oversight mechanisms exist to protect against any possible biased application of the law. The ACCI adds that in the first six months of its operation, the ABCC had opened 118 investigations, 50 of which concerned the conduct of employers and the protection of workers’ interests; a trend which has continued.
24. 144. As regards the specific allegations of restrictions on the subject matter of collective bargaining, the ACCI maintains that: (1) the FWA has adequate right of entry provisions setting out statutory regulation which should not be subject to parallel regulation through collective agreements; (2) the Code 2016 does not limit unions’ rights to promote membership but rather prohibits clauses in collective agreements from being used to force businesses to actively promote union membership potentially misleading employees on their freedom of association rights; (3) as regards monitoring of collective agreements, it is proper that unions not be able to force an ongoing role in the management of organizations or the oversight of labour, especially where there is a well-developed inspection and compliance function; and (4) concerns as to compliance of agreements can be raised for investigation and unions can enter sites and ask to inspect records or seek dialogue at the request of a member. As regards negotiating clauses calling for consultation on the engagement of employees, the ACCI maintains that: (1) providing unions with veto power on who is hired would be a misuse of collective bargaining; and (2) section 11 does not prohibit, restrict or impede an employer or employee’s right to consult with a trade union on any of these matters; it merely prohibits any mandated requirement to do so.
25. 145. As regards individual flexibility agreements (IFAs) in the Code 2016, the ACCI states that this is a statutory option which has been expressly provided for in the FWA and they coexist rather than replace collective agreements. The IFAs are poorly used and unions can reduce or specify their scope through collective bargaining. As regards site induction processes, the ACCI contends that mandatory induction meetings with on-site union leaders would create an unacceptable risk of coercion and misrepresentation of workers’ right to choose to associate or not with a trade union on-site.
26. 146. The ACCI states that construction unions enjoy statutory rights to enter construction sites and exercise these rights regularly; what is not allowed is a standard term in a proposed collective agreement that would allow a person who has been denied an entry permit on legislative grounds to enter the premises. This ensures minimal disruption of worksites and that safety representatives’ right of entry is not misused for improper purposes.
27. 147. The ACCI concludes that there is insufficient evidence to demonstrate that the legislation in question is in any way contrary to the principles of freedom of association and the effective recognition of the right to collective bargaining as the complainant’s allegations lack both particularization and substance. Specific regulation and oversight of this industry has existed continuously over 15 years regardless of the government in power.
28. 148. Finally, in its communication dated 3 February 2019, the Government submits a summary of the key findings in an independent review undertaken on the BCIIP Act, called for by the Act and following a consultation process with the social partners, which was tabled in Parliament on 6 December 2018 along with the Government’s response and are publicly available. As regards the allegedly coercive investigative powers of the ABCC, the review finds that the safeguards and public accountability mechanisms incorporated in the current oversight arrangements are adequate and appropriate and further notes that the Government had amended the Bill to include additional safeguards after the ACTU had raised concerns during the initial deliberations. As regards the level of penalties, the review finds that there is little data on their deterrent effect so far therefore no changes should be adopted at this point.

C. The Committee’s conclusions

1. 149. The Committee notes that this case concerns allegations that the BCIIP Act, which came into effect on 1 December 2016, and its related Code 2016 issued by the Minister for Small and Family Business, the Workplace and Deregulation, violate the freedom of association rights in the construction industry. According to the complainant, the BCIIP re-establishes the ABCC, a statutory agency that was first created through the enactment of the Building and Construction Industry Improvement Act 2005 (BCII Act) (an Act which had already been commented upon by the Committee).
2. 150. The Committee notes the Government’s indication that it takes Australia’s international obligations very seriously and the right to freedom of association and collective bargaining were considered in drafting the BCIIP Act and the Code 2016. The Government and the ACCI further affirm that three Royal Commissions and numerous Federal Court decisions against the building and construction union support the need for specific regulation of the building and construction industry, including the need for higher penalties for breaches of workplace relations laws as well as a dedicated workplace relations regulator. The Government adds that employers have also been found to have behaved unlawfully, including by forcing subcontractors or individual employees to engage with unions in order to gain employment and by engaging in cartel arrangements, a particular problem in an industry of over 300,000 small businesses.
3. 151. As regards the specific allegations that the Act introduces a prohibition, unique to the construction industry, of “unlawful picketing” which includes any industrially motivated action that directly restricts persons from accessing or leaving a building site, or has that purpose including the mere organizing of such action, even before persons physically assemble, the Committee notes the Government’s indication that this prohibition is necessary in the interests of public safety, public order, and the protection of the rights and freedoms of others, while the prohibition does not affect in itself the engaging in or taking of protected industrial action under the FWA. While the complainant alleges that conduct such as peaceful assemblies and the conveying of information to persons entering or leaving a building site would fall under these provisions, the ACCI observes that the provisions in the BCIIP Act take place in the context of an industry which will often involve actions that are not peaceful, where coercive conduct features and where attempts are made to restrict freedom of access to work for non-union and non-striking workers. The Government for its part maintains that the prohibition aims at prohibiting picketing that is designed to cause economic loss to building industry participants for industrial purposes but would not cover action that seeks to draw attention to a social, environmental or community issue. The Government adds that this provision seeks to address particular behaviour such as where persons who are not employees of an affected construction site nevertheless seek to disrupt work there.
4. 152. The Committee recalls that it has considered that the prohibition of strike pickets is justified only if the strike ceases to be peaceful. The Committee has also considered legitimate a legal provision that prohibited pickets from disturbing public order and threatening workers who continued to work [see Compilation of decisions of the Freedom of Association Committee, 2018, sixth edition, paras 937–938]. The Committee notes that section 47 of the BCIIP Act defines an unlawful picket as, among others, an action which has the purpose of preventing or restricting a person accessing or leaving a building site or would reasonably be expected to intimidate a person from so doing. The Committee requests the Government to ensure that the prohibition is applied in a manner consistent with the principles of freedom of association and the effective recognition of the right to collective bargaining and to provide detailed information on the application in practice of this provision across the next three years and copies of any relevant court decisions that might touch upon its interpretation during that period.
5. 153. As regards the complainant’s allegation that the significant increases in the maximum penalties applicable to unlawful industrial action, coercion and the new restriction on “unlawful picketing” in the BCIIP Act violates freedom of association in the construction industry, the Committee notes the Government’s explanation that the penalties applicable under the FWA to all industries were inadequate to deter unlawful behaviour in the building and construction industry and that this was clearly reflected in the evidence received by the Cole Royal Commission. The ACCI supports this assertion, underlining that the penalties in the Act are prescribed as maximum penalties and the courts act independently in determining the appropriate level and consideration of proportionality. In the absence of any specific examples of an abusive imposition of such fines, the Committee does not have sufficient information available to it to conclude that the disparity in fines for unlawful industrial action in the construction industry would impede the exercise of freedom of association in the sector but recalls that such fines should not be imposed in cases where the unlawful industrial action as defined would not be in conformity with the principles of freedom of association.
6. 154. Finally, the Committee notes the complainant’s allegations that the BCIIP Act provides for coercive investigative powers for the new ABCC, a body the complainants maintain has a demonstrable record of hostility to workers’ interests, which enable it to issue notices that compel a recipient to attend and answer questions relating to an investigation under oath and/or provide information or documents and expressly overrides the common law privilege against self-incrimination. Under section 62, the failure to comply with ABCC notices is a criminal offence attracting a penalty for individuals of up to six months’ imprisonment and/or a fine of AUD5,400. The Government for its part indicates that: (i) ABCC forms part of a system of labour inspection and is statutorily required to perform its functions without distinction between the interests of unions, employers, or contractors; (ii) these powers were granted to the industry regulator upon recommendation by the Cole Royal Commission which considered that, without them, the industry’s well-documented culture of intimidation would prevent reporting of unlawful behaviour; (iii) the obligation of non-interference contained in Article 2 of Convention No. 98 does not preclude state parties from establishing investigative bodies with coercive powers for the purposes of regulating and investigating the conduct of their workers’ and employers’ organizations; and (iv) while the BCIIP Act excludes reliance on the common law privilege against self-incrimination to refuse to provide information under an examination notice, the Act provides for both use and derivative use immunity in relation to the information obtained in these circumstances.
7. 155. The ACCI for its part points out that the ABCC Commissioner must, under the 2016 legislation, apply to the Administrative Appeals Tribunal (AAT) to obtain scope to compulsorily examine witnesses, obtain documents, etc., and must notify the Commonwealth Ombudsman of an issue of examination notice, which provides an additional level of scrutiny and protection. The ACCI adds that the Commissioner must ensure that the policies and procedures adopted and resources allocated are applied to the greatest extent possible in a reasonable and proportionate manner to each of the categories of building industry participants.
8. 156. The Committee recalls that it had previously examined questions of excessive powers of the ABCC within the framework of the 2005 Building and Construction Industry Improvement Act which was examined by the Committee in its 338th Report (November 2005). At that time, the Committee considered that the expansive powers of the ABCC, without clearly defined limits or judicial control, could give rise to serious interference in the internal affairs of trade unions and requested the Government to introduce sufficient safeguards so as to ensure that the functioning of the ABC Commissioner and inspectors did not lead to such interference [see 338th Report, para. 455]. While taking due note of the specific steps taken to ensure various procedural safeguards in this regard and the independent review’s conclusion, following consultations with the stakeholders, that these safeguards and mechanisms are adequate and appropriate, the Committee observes that the penal sanctions of imprisonment set out in the 2016 BCIIP Act could serve as a serious impediment to the workers’ exercise of their trade union rights should the powers of the ABCC be used in a manner that directly affects these rights and invites the complainant organization to provide detailed information to the Government of any such cases so that it may continue to effectively review the matter and consider the necessity of introducing any additional safeguards. Taking due note of the indication that the penal sanctions that may be imposed under the 2016 BCIIP Act set out the maxima that may be applied and that the judiciary acts independently and adheres to the principles of proportionality, the Committee requests the Government to keep it informed of the use of these penal sanctions against trade unions over a period of three years.
9. 157. As regards the 2016 Code, the Committee notes the complainant’s allegations that it restricts the contents of collective bargaining agreements and severely impedes the capacity of workers to negotiate terms favourable to them in enterprise bargaining agreements. The complainant highlights section 11(1)(a) that prohibits any clause in an agreement which imposes or purports to impose limits on the right of a code covered entity (employer) “to manage its business or to improve productivity”. The Committee notes the complainant’s further allegations that other subsections prohibit clauses that would: (i) allow union representatives to address employees about the benefits of union membership or to promote the benefits of becoming a union member; (ii) that give trade unions the capacity to monitor collective agreements, for example, for compliance purposes; or (iii) that require an employer to consult with a trade union representative as to the source, number or type of employees to be engaged or the engagement of subcontractors.
10. 158. The Government for its part affirms that restrictions to collective bargaining and the content of collective agreements under the Code 2016 balance the right of employees to negotiate their terms and conditions of employment with the need to ensure that employers, particularly small subcontractors, are able to manage their businesses efficiently and productively. The Committee notes that the Government refers to a number of restrictive clauses commonly found in building and construction industry enterprise agreements including “jump up” clauses which provide that subcontractors cannot be engaged unless they apply wages and conditions at least as favourable as the enterprise agreement that applies to the head contractor. According to the Government, the direct effect of this clause, which was found in 70 per cent of a random sample of construction agreements studied by the Productivity Commission, is an increase in labour costs and therefore the overall costs of a project. Finally the Government indicates that the limitation of bargaining clauses in the Code 2016 only applies to builders who wish to undertake Commonwealth funded building work.
11. 159. The Committee further notes the views of the ACCI that the core function of the Code 2016 is to set minimum standards of employer conduct and expectations in the event the employer chooses to tender for government work but in no way regulates either employees or trade unions. The Code 2016 aims to promote an improved workplace relations framework and safe, healthy, fair, lawful and productive building sites for all building industry participants in a manner fully in line with Convention No. 94 and its accompanying Recommendation No. 84 and is outside of the mandate of the CFA. The ACCI contests the allegation that the Code 2016 restricts the parties in their collective bargaining rights and states that this is shown by the bargaining statistics cited. Finally, the ACCI contests the complainant’s allegations that the ABCC has a demonstrable record of hostility to workers’ interests and emphasizes that numerous oversight mechanisms exist to protect against any possible biased application of the law. As regards the specific allegations of restrictions on the subject matter of collective bargaining, the ACCI maintains that: (1) the FWA has adequate right of entry provisions setting out statutory regulation which should not be subject to parallel regulation through collective agreements; (2) the Code 2016 does not limit unions’ rights to promote membership but rather prohibits clauses in collective agreements from being used to force businesses to actively promote union membership potentially misleading employees on their freedom of association rights; (3) as regards monitoring of collective agreements, it is proper that unions not be able to force an ongoing role in the management of organizations or the oversight of labour, especially where there is a well-developed inspection and compliance function; and (4) concerns as to compliance of agreements can be raised for investigation and unions can enter sites and ask to inspect records or seek dialogue at the request of a member. As regards negotiating clauses calling for consultation on the engagement of employees, the ACCI maintains that: (1) providing unions with veto power on who is hired would be a misuse of collective bargaining; and (2) section 11 does not prohibit, restrict or impede an employer or employee’s right to consult with a trade union on any of these matters; it merely prohibits any mandated requirement to do so.
12. 160. While taking due note of the Government’s explanation, echoed by the ACCI, as to the need to restrict certain subjects from negotiation and the clarification that this restriction only concerns builders who wish to undertake Commonwealth funded building work, the Committee is bound to recall that measures taken unilaterally by the authorities to restrict the scope of negotiable issues are often incompatible with Convention No. 98; tripartite discussions for the preparations on a voluntary basis of guidelines for collective bargaining are a particularly appropriate method of resolving these difficulties [see Compilation op. cit., para. 1290]. The Committee invites the Government, in consultation with the representative organizations of workers and employers concerned, to review section 11 of the Code 2016 to respond to any concerns specific to the industry while privileging the free and voluntary nature of collective bargaining.
13. 161. As regards the complainant’s allegation that the Code 2016 limits the level of collective bargaining by prohibiting bargaining for an unregistered written agreement which can include site or project agreements, the Committee notes the Government’s indication and the views of the ACCI that section 59 of the BCIIP Act provides that project agreements are not enforceable in order to deter “side deals”, namely informal agreements and other arrangements that may be made by building contractors and unions seeking to circumvent the Code’s prohibited content provisions for enterprise agreements and to secure standard employment conditions. The Government adds that award terms and conditions of employment are to be dealt with in enterprise agreements (or individual flexibility agreements) made under the FWA or in common law agreements between employers and individual employees in order to ensure transparency and guarantee oversight by the Fair Work Commission, Australia’s independent national workplace relations tribunal. Finally, the Committee notes the Government’s indication that the clear intent of this prohibition is to protect genuine collective bargaining in the building and construction industry in line with Australia’s national circumstances. The Committee notes the ACCI views that: (1) individual flexibility agreements (IFAs) in the Code 2016 represent a statutory option which has been expressly provided for in the FWA and they coexist rather than replace collective agreements; (2) IFAs are poorly used; and (3) unions can reduce or specify their scope through collective bargaining.
14. 162. The Committee observes that the effective prohibition of project agreements was a matter raised by the complainants in the previous case concerning the 2005 BCII Act, while the ACCI maintains that the BCIIP Act can be differentiated on numerous points in including additional safeguards that have been put in place for its application. The Committee recalls that when examining the BCII Act, it had recalled that according to the principle of free and voluntary collective bargaining embodied in Article 4 of Convention No. 98, the determination of the bargaining level is essentially a matter to be left to the discretion of the parties and, consequently, the level of negotiation should not be imposed by law, by decision of the administrative authority or by the case law of the administrative labour authority. The Committee therefore requested the Government to take the necessary steps with a view to revising the 2005 Act so as to ensure that the determination of the bargaining level was left to the discretion of the parties and not imposed by law, by decision of the administrative authority or the case law of the administrative labour authority [see 338th Report, para. 448]. In light of the complainant’s allegations and the Government’s reply, the Committee invites the Government to review the Code 2016 and the BCIIP Act as appropriate, in consultation with the representative organizations of workers and employers concerned, so as to allow for the possibility of bargaining over project agreements in a manner that fully respects free and voluntary collective bargaining.
15. 163. Finally, the Committee notes the complainant’s allegation that section 13(2)(p) of the Code 2016 restricts workers that are trade union delegates or representatives from undertaking or administering site induction processes, while section 14 of the Code 2016 restricts the workers’ access to union representation as its application entails the inability of unions to enter workplaces at the invitation of the employer. The Committee notes the information provided by the Government and the ACCI that: (i) these provisions are only intended to prevent undue pressure to join a union on employees in the early stages of a new job or project, when they are particularly vulnerable to such pressure; (ii) unions can exercise the right to enter to promote union membership at other times consistent with right of entry provisions in the Fair Work Act; and (iii) given the culture that exists in the industry, which can lead to employees being given misleading information about the need to join a union in order to be allowed to work, demonstrated by numerous court cases, these provisions are necessary.
16. 164. The Committee recalls that governments should guarantee the access of trade union representatives to workplaces, with due respect for the rights of property and management, so that trade unions can communicate with workers in order to apprise them of the potential advantages of unionization [see Compilation, para. 1590]. While taking due note of the Government’s concern for the need to prevent undue pressure on workers and to protect their choices of association, the Committee also observes the importance of ensuring that workers are fully informed of their rights to collective representation. The Committee recalls the compulsory requirement for all new employees to be provided with the Fair Work information statement, which clearly sets out representation rights and rights of entry for union officials and their role in speaking with employees and looking into suspected breaches of employment law. The Committee requests the Government to consult with the representative organizations of workers and employers concerned on the effectiveness of ensuring that workers are fully informed of their rights to collective representation and union rights of access.