Front page news of picketing outside a Melbourne treatment plant is a reminder of the challenges to delivering successful construction projects. At a time when the construction sector is under the regulatory and political spotlight, it will require more than just getting the right contracts in place and focussing on planning, mitigation and compliance will be worth the investment.
Many people are now asking how to get on with the business of building in an industrial relations climate which has seen:
- The Federal Court granted an injunction against the AMWU this week following dramatic images of local construction workers blockading a West Werribee treatment plant while helicopters were being used to fly workers onto the site.
- Police, construction workers and union members clashing a few months ago in the heart of Melbourne's CBD at Grocon's Myer site.
- The Victorian Government late last year excluding one of this nation's largest builders, Lend Lease, from participation in Victorian Government work due to non-compliance with the Implementation Guidelines to the Victorian Code of Practice for the Building and Construction Industry.
- The Implementation Guidelines to the Victorian Code of Practice for the Building and Construction Industry revised in December 2012 and Workplace Relations Minister Bill Shorten MP issue a new code of practice for the building and construction industry in January 2013. The industry needs to navigate and satisfy both codes (with each stating it takes precedence over the other) while the debate and challenge surrounding perceived conflicts and inconsistencies between the two continues.
With such high profile events it's no surprise that industrial relations is well and truly on the agenda and the sector is under greater regulatory and political scrutiny.
Add to this the looming State and Federal elections and it is fair to say the path ahead for construction will be anything but clear – and has every chance of changing again.
The recent spate of disputes illustrates that it is never going to be as simple as your construction contract neatly allocating risk to one party or another. Ultimately any interruption to work – whatever the cause – challenges the successful delivery of projects, business requirements and, more often than not, the common objectives of industry participants. An inability to participate in the key industry sectors such as government projects has even more fundamental implications for your business.
Although no one can predict what the future holds, there are things you can be doing now to help navigate the uncertain waters ahead:
* Knowledge is power - revisit the risk allocation in your current contracts – how are you allocating responsibility for industrial relations and the effects of industrial related disputation and disruption (not all issues and knock-on effects will be neatly addressed in an "industrial relations" clause).
* Plan – as they say, you cannot always prevent an accident, but you can take steps to mitigate the risk or be ready to manage the damage. This includes:
* early warnings – communication channels must be open; ensure reporting is transparent, systematic and sufficiently detailed;
* understanding - do you understand the risk areas and behaviours on your projects; and
* plans - do contractors and subcontractors have suitable and effective industrial relations plans in place or are they sitting in the bottom drawer – is it time to ask questions?
* Do not forget OH&S – it matters and an unsafe workplace may justify industrial action.
* Contracting approach - if planning future projects, work through risk allocation carefully, do your due diligence and look to your contract structure – are there options which will drive more collaborative or cooperative behaviour?
* Compliance and participation – both the State and Commonwealth have mandatory codes and guidelines with wide application to public building works and both the entities procuring and performing those works. The consequences of non-compliance are significant. Where they apply it's crucial to get contract and tender terms right, to implement them and to ensure compliance. Click here for more information on the application of the State and Federal codes to you, recent changes and compliance.
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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