Australia: New IR watchdog for the building and construction sector

Last Updated: 29 April 2012
Article by Evan Willis and Charles Power

Most Read Contributor in Australia, September 2016

In late March 2012 the federal government passed the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2012. This legislation will abolish the Office of the Australian Building and Construction Commissioner (ABCC) and create a new agency, the Office of the Fair Work Building Industry Inspectorate (FWBI).

The key changes are explained below. It is expected that the changes will come into effect some time during 2012.

Integration into Fair Work Act scheme Building unions, their officials, employees, employers and other participants in the building industry will be subject to the same offences and penalties in the Fair Work Act 2009 (Cth) (Act) as their counterparts in other Australian industries. There will no longer be a separate statutory regime of more onerous offences and higher penalties for building industry participants.

FWBI inspectors will perform the same functions and powers as a Fair Work Inspector in relation to building matters.

In legal proceedings regarding a building matter the FWBI Director or inspector cannot initiate or progress proceedings that relate to matters that have settled between the other parties. Consider, for example, a proceeding relating to alleged coercion by a building union of a building contractor to employ a person as union delegate in contravention of s 355 of the Act. If the contractor and union settle that matter, the FWBI inspector cannot later seek to prosecute the union for contravening s 355.

The new legislation also makes it clear that FWBI will not be responsible for industrial compliance in respect of off-site prefabrication of made-to-order components i.e. manufacturing that takes place in permanent off-site facilities and is separate from the building project. However, pre-fabrication of building components that takes place on auxiliary or holding sites separate from the primary construction site(s) will remain subject to FWBI's compliance powers.

Safeguards for exercise of coercive powers

The FWBI Director will have the power to require a person to provide information, documents or evidence relevant to an investigation. A person who fails to comply with such a requirement will remain liable to a maximum penalty of 6 months imprisonment or $3,300 fine. However, the person would retain the right to claim legal professional privilege or public interest immunity.

In order to exercise the coercive powers to obtain information, documents or evidence the FWBI Director will need to satisfy a designated presidential member of the Commonwealth Administrative Appeals Tribunal that:

  • there are reasonable grounds to believe the person has information or documents or is capable of giving evidence relevant to the investigation;
  • all other methods of obtaining the material or evidence have been tried or were not appropriate;
  • the information or evidence would be likely to be of assistance to the investigation; and
  • it would be appropriate, having regard to all of the circumstances, to impose the requirement.

A person who is being examined will be entitled to be represented at the examination by a lawyer of the person's choice. The FWBI Director cannot refuse a person representation by a particular lawyer because that lawyer has represented or is also representing another person who has been examined.

The FWBI Director cannot require a person to give an undertaking not to disclose information or answers given at the examination or to discuss matters relating to the examination with any other person. This will mean, for example, that a person cannot be prevented from discussing their experiences at the examination with family members.

A person who attends a compulsory examination is entitled to payment for reasonable expenses incurred by the person in attending the examination. Reasonable expenses will cover matters such as travel, accommodation and legal expenses.

The Commonwealth Ombudsman will monitor and review all examinations and provide reports to the Parliament on the exercise of this power.

Option to be exempt from exercise of coercive powers Interested persons may apply for one or more building projects to be exempt from the exercise of coercive powers. These applications will be determined by the Independent Assessor, who must be satisfied that it would be appropriate to make the determination, having regard to the object of the Act and any matters prescribed by the regulations. According to the explanatory memorandum accompanying this legislation, such matters might include a demonstrated record of compliance with workplace relations laws, including court or tribunal orders, in connection with the building project.

The Independent Assessor must also be satisfied that it would not be contrary to the public interest to make a determination.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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