Australia: Reforms To The Australian Building Construction Commission

The Minister for Industrial Relations, Julia Gillard, introduced new legislation into the Federal Parliament on Wednesday 17 June 2009 to reform the current arrangements for the building and construction industry.

The Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2009 deals with a number of important issues for the construction and building industry.

Importantly, the Bill signifies a continued commitment from the Government to retain a 'watch dog' for the construction and building industry and largely follows recommendations made by Hon Justice Murray Wilcox QC.


Key issues for the building and construction industry:

  • providing for consistency between the Fair Work Act and the laws dealing with the building and construction industry
  • watch dog for the building and construction industry to be retained
  • Australian Building and Construction Commission will be abolished from 1 February 2010
  • new independent Fair Work Building Industry Inspectorate to be created
  • retaining 'coercive powers' for examinations with greater protections
  • new Fair Work Building Industry Inspectorate to have functions in relation to modern awards and National Employment Standards
  • unlawful industrial action and coercion provisions for the construction and building industry will no longer be specific to the building and construction industry but as contained in the Fair Work Act
  • the future of the National Code of Practice for the Construction Industry to be retained until at least mid 2010

Goodbye to the BCII Act and ABCC

Once passed into legislation the new Act, to be called the Fair Work (Building Industry) Act 2009, will replace the Building and Construction Industry Improvement Act.

The Australian Building and Construction Commission will be abolished from 1 February 2010 to be replaced with the Fair Work Building Industry Inspectorate (the BI Inspectorate). The Commissioner's functions will be taken over by the Director of the BI Inspectorate.

A Fair Work Building Industry Inspectorate Advisory Board is also established by the Bill. The Advisory Board will make recommendations to the Director on policies to guide the performance of the Director's functions and the priorities of, and the programs to be implemented by the Director.

Safety net entitlements

While the Bill largely provides that the Director's functions are the same as those of the ABCC's, namely compliance with designated building laws and the building Code, the Bill also provides that the Director may inquire into, investigate, and commence proceedings in relation to safety net contractual entitlements as they relate to building industry.

This provision enables the Inspectorate to take action in relation to breaches of a modern award or the National Employment Standards.

Coercive powers to be retained

The Bill retains provision for the use of the coercive examination powers by the BI Inspectorate but will make the use of these powers dependent on a presidential member of the Administrative Appeals Tribunal issuing an Examination Notice.

The presidential member must issue the examination notice if he or she is satisfied of certain conditions including that:

  • there are reasonable grounds to believe that the person to whom the application relates has information or documents, or is capable of giving evidence, relevant to the investigation;
  • any other method of obtaining the information, documents or evidence have been attempted and have been unsuccessful or is not appropriate.

The coercive power provisions specifically relate to compulsorily obtaining information (including requiring a person to attend an examination and answer questions) or documents from a person whom the Director believes has information or documents relevant to an investigation under the proposed Act.

The Bill provides for increased protections in circumstances where coercive powers are to be used, including:

  • The person interviewed may, if he or she so chooses, be represented at the examination by a lawyer of the person's choice;
  • Persons summonsed for examination will be reimbursed for their reasonable expenses, including all reasonable legal expenses;
  • The Director may require the information or answers given by the person at the examination to be verified by, or given on, oath or affirmation;
  • A person will not be required to give information, produce a document or answer questions if to do so would disclose information that is the subject of legal professional privilege or would be protected by public interest immunity;
  • The Director must not require the person to undertake not to disclose information or answers given at the examination or not to discuss matters relating to the examination with any other person;
  • As soon as practicable after an examination of a person is completed, the Director must give the Fair Work Ombudsman a report about the examination, a video recording of the examination and a transcript of the examination.
  • The Fair Work Ombudsman will report to the Parliament on the exercise of the power.

The coercive power provisions in the Bill are subject to a 5 year sunset clause. The 5 year period will commence on 1 February 2010. The powers may be extended at that time subject to a Government review.

Switch on or switch off

The Bill allows for the new coercive power provisions to be switched-on and switched-off on new projects. The aim of the 'switching on' and 'switching off' provisions is to recognise that it is not appropriate for the coercive examination provisions to apply to lawful and compliant sites.

All projects that commenced prior to 1 February 2010 will remain covered by the current coercive power provisions.

The coercive powers will be 'switched on' on projects commencing on or after 1 February 2010 with the ability of interested persons seeking to have the coercive powers switched off or after 1 February 2010 in relation to a specific project by making an application to the new office, the Independent Assessor – Special Building Industry Powers.

What should construction and building employers do?

Employers in the construction and building industry need to ensure compliance with the National Code of Practice for the Construction Industry and Building and Construction Industry Improvement Act until new arrangements are in place.

Employers should also be reviewing their industrial strategies in line with the commencement of the Fair Work Act from 1 July 2009.

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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