Australia: Hot issues for the building and construction industry in 2014

Last Updated: 21 February 2014
Most Read Contributor in Australia, September 2016

2014 is looking to be a very big year for the building and construction industry. With the change of government comes a change of approach and attitude to how the industry should be regulated. We set out below what we anticipate will be the hot issues that employers and other industry stakeholders should look out for this year.

  1. Return of the ABCC

The Coalition Federal Government introduced a Bill on 14 November 2013 to re-establish the Australian Building and Construction Commission (ABCC). If the Bill is passed, the ABCC will replace the current Fair Work Building Inspectorate and have even broader powers and more extensive reach than it's predecessor and the former ABCC. Penalties will also increase and the ABCC will be able to pursue uncapped compensation. Further, a new building code and guidelines are being developed to commence at the same time as the resurrected ABCC.

The Bill is unlikely to pass until the party composition of the Senate changes from 1 July 2014. Regardless, we consider the return of the ABCC is only a matter of time and employers in the building industry should take notice now of what will soon be re-established as well as introduced.

  1. Royal Commission

On Monday 10 February 2014 the Prime Minister announced a Royal Commission to inquire into alleged financial irregularities of unions. The Terms of Reference can be summarised as follows:

  • the financial management, use of funds by, any unlawful purposes of and accountability of entities established by unions or their officers
  • the relationship between such entities to any person, employee association or organisation, including any influence or control they may have over such entities
  • circumstances in which funds are sought from any third parties and paid to such entities
  • any unlawful conduct of union officers who hold a position of responsibility with respect to such entities or which conduct has been for their benefit or for the detriment of another person, association or organisation
  • any bribes, secret commissions or other unlawful payments or benefits involving unions or their officers
  • the adequacy and effectiveness of existing systems of regulation and law enforcement in dealing with any of the above conduct.

The Prime Minister has also made it clear that the inquiry will not be restricted to any union, organisation or set of allegations: the inquiry will go where the evidence takes it, including inquiring into allegations of corruption, intimidation and links to organised crime as recently reported by the ABC's 7.30 and Fairfax Media.

A Royal Commission is a temporary body appointed by the Government to investigate and provide recommendations on a specified issue as defined by the Terms of Reference. To enable it to carry out its investigation, the Royal Commission has wide ranging coercive powers under the Royal Commission Act 1902.

A Royal Commission can summon witnesses and take evidence (although it cannot require a party to give a statement or make an affidavit), order the production of documents and obtain search warrants. It is a crime to provide false or misleading evidence to a Royal Commission or to conceal evidence from a Royal Commission. Union officials and employers may be called to give evidence to the Royal Commission.

  1. More stringent building and construction codes

In a highly anticipated recent decision, the full Federal Court held that the State of Victoria (State) did not take adverse action or coerce contractors in two separate instances when it indicated that the contractors would be excluded from work on the State-funded Circus Oz and New Bendigo Hospital projects because of non-code compliant provisions in their enterprise agreements.

Following this decision, the Victorian Government has recently announced that companies tendering for Victorian Government work will have to drug and alcohol test their workers and use up-to-date monitoring equipment under changes to the Victorian Implementation Guidelines to the Victorian Code of Practice for the Building and Construction Industry. New South Wales and Queensland Governments have also introduced Building Codes and Guidelines. The decision may result in more stringent obligations for employers under the Federal and State Building Codes and Guidelines.

The CFMEU have filed an application for special leave to appeal the decision with the High Court of Australia. The application is yet to be determined.

For further information on any of these issues, including advice and assistance in providing evidence at the Royal Commission, please do not hesitate to contact us.

Holding Redlich has had extensive experience representing both organisations and prominent individuals in Royal Commissions and Commissions of Inquiry. Relevantly, our experience includes:

  • assisting the Victorian State Government in the Royal Commission into Building and Construction Industry (2001-2002)
  • acting for SunWater (a Queensland Government Owned Corporation) in the Queensland Floods Commission of Inquiry (2011)
  • acting for the Senior Flood Engineer of Wivenhoe Dam in the Queensland Floods Commission of Inquiry and subsequent proceedings before the Queensland Crime and Misconduct Commission (2011 – 2012).

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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