From its outset the Cole Royal Commission into the Construction and Building Industry was a partisan affair argues ACTU Assistant Secretary Richard Marles.

In April 1997 this document “The Workplace Relations Act – Modernising Australia’s Industrial Relations” was produced. It is an explanation of the Workplace Relations Act under the name of Peter Reith, the then Australian Minister for Industrial Relations. And on the last page of that document under the heading “What to expect from the new law – Better performing industry sectors” it says:

The government is working closely with important industry sectors to use the new law productively to achieve workplace reform. This includes the waterfront and maritime industries, meat processing, building and construction and coal.

And so we had for the first time the now famous Howard Government union hit list.

Around this time there was a very damaging dispute for the Mining Division of the CFMEU at Hunter Valley No1. Throughout the entire period of this Government there have been many disputes aimed at the Meatworkers Union. And of course in 1998 there was the Maritime Dispute, which really rates up there with the Air Traffic Controllers Dispute in America and the Coal Miners Dispute in Britain, as being this Government’s totem dispute aimed at attacking the trade union movement.

So the union movement regards the Cole Royal Commission as nothing more or less than this Government fulfilling its promise of April 1997 to attack the fourth leg of that quadrella the Construction Division of the CFMEU.

“From its outset the Royal Commission into the Construction and Building Industry was a partisan affair.”

From its outset the Royal Commission into the Construction and Building Industry was a partisan affair.

Early on, in a moment of honesty, the Royal Commission produced a discussion paper which said that the Australian construction industry had roughly the same or higher productivity levels than the construction industries in the US, Japan and Western Europe. The Royal Commission had put before it a document from Access Economics which said that labour productivity in the Australian construction industry was higher than that of the construction industries in Germany, Japan, Sweden or the US. And a study from America was also put before the Royal Commission which showed that in that country levels of productivity were 30% higher on unionised sites than they were on non unionised sites in commercial building projects. But does anyone seriously believe that this Royal Commission was about bringing to light the impressive record of the Australian construction industry by international standards? Of course it wasn’t.

In terms of occupational health and safety the construction industry has a rate of workplace deaths which runs at twice the national average. But to what extent did the Royal Commission examine the issue of occupational health and safety? Well it only examined it to the extent of arguing that the union movement’s involvement in occupational health and safety is unhelpful.

The Australian Taxation Office put before the Royal Commission a report which said that they believed 40% of income in the construction industry is hidden. But to what extent was there any examination by the Royal Commission of the issue of tax avoidance? The answer is there was none.

Instead, more than 90% of hearing time was devoted to untested allegations against unions. Only 3% of hearing time was spent on bad employer practices.

It is as if the Royal Commission tried to create a construct where unions were running around the construction industry wearing black hats and black capes persecuting lily white employers who were as pure as the driven snow. Such a proposition is patently absurd.

And to what extent were unions given a chance to test those allegations? In normal courts you can test adverse evidence through rigorous cross examination. That is the point of cross examination – to be rigorous and unfettered. But in the Royal Commission unions had to apply for the right to cross examine those people making these allegations. Unions had to forecast their punches. And most of those applications were refused by the Royal Commission. That is, on most of the occasions where unions sought to test the evidence against them, they were simply not given the chance to do so.

Now you might be asking at this point how this can be. Is the ACTU alleging some grand political corruption on the part of Commissioner Cole? The answer is no.

In legal terms Commissioner Cole has acted appropriately. Because Royal Commissions ultimately are merely an arm of executive government. They are allowed to be partisan. Indeed, this Royal Commission was asked in its terms of reference to make recommendations as to legislation. It might surprise you to know that there is already a body out there which examines and determines whether or not to make legislation. It is called the Commonwealth Parliament. So the scandal is not so much in Commissioner Cole. The scandal is that this Government has spent $60 million asking a Royal Commission to do something which the Parliament already does.

And why did it ask them to do that? The answer is to try and give these recommendations some cloak of independence. Well I am here to tell you that that cloak simply does not exist. Everything the Royal Commission says is as partisan toward the Government as anything that this Government does.

“… 87% of the findings of the Royal Commission were against unions. … There were no findings in relation to tax avoidance at all.”

So it is of no surprise that 87% of the findings of the Royal Commission were against unions. Many of these related to trivial issues like holding meetings outside of official meal breaks. Some of these issues go back as far as seven years. Interestingly, something like 60% of the findings relate to Western Australia, one of the smaller states in the Commonwealth.

But there were only two findings against employers in relation to occupational health and safety. This is an industry which has a poor record in relation to occupational health and safety. 50 workers are killed every year. And yet there were only two findings against employers in relation to OH&S.

There were no findings in relation to tax avoidance at all.

“… this is the last thing we need in the construction industry.”

As for the recommendations we try to characterise them in four categories.

Firstly, there is an attempt to put in place a legislative agenda. This agenda really represents the stalled industrial agenda that the Government has for the entire Australian labour force. There are about a dozen pieces of legislation which are currently stalled in the Parliament which seek to introduce this Government’s further industrial agenda. So having bitten off more than they can chew these recommendations seek to implement that agenda specifically in relation to construction.

So we see such recommendations as an abolition of pattern bargaining and site bargaining. We see recommendations which give rise to a highly restricted right of entry for union officials. We see recommendations which give rise to a highly restricted access to industrial action on the part of unions. And of course we see increased penalties for unionists and union officials if any of these proposals are broken. So that is the first general area of recommendations from the Commission.

The second is the introduction of the Australian Building and Construction Commission which is put in place to try and police this new agenda. It is to be modelled on the ACCC. Such a proposal threatens to undermine a key dynamic in industrial relations in this country and we’ve seen this occur on a number of occasions where the ACCC has flirted in the industrial arena.

When employers and unions engage in an industrial dispute lots of things happen. Often employers will initiate legal proceedings against unionists and union officials. But ultimately when the dispute is settled almost always the litigation is settled with it. Rarely do these proceedings continue until finality. And this is because all parties have an investment in an ongoing relationship with each other. It is hard to have productive relations with your workforce if you are trying to sue them at the same time.

This dynamic underpins the co-operative workplace culture which characterises Australian industrial relations. But when you introduce a third party like the ACCC which has no investment in the employment relationship at all you find that unionists and union officials are being sued in relation to a dispute which has long been settled. It fundamentally undermines any notion of trying to co-operate in the workplace. And the proposal for a Australian Building and Construction Commission is all about having this dynamic permanently enshrined within the construction industry. One would think that is the last thing we need.

The third issue is to extend the reach of the National Code of Practice. The Government has a view of our industrial system but it also has a view of how employers should act within that system. The National Code of Practice essentially requires all companies who participate in projects where there is Commonwealth money to sign up to a very harsh regime of industrial relations practices. Again one would think this is the last thing we need in the construction industry.

And finally, there is a recommendation that the role of unions be diminished in occupational health and safety. Over 150 years unions have been the driving force in improving health and safety in the workplace. No one could credibly argue with that proposition. And yet, here in an industry which has a poor OH&S record, the Royal Commission makes the recommendation that the unions’ role in occupational health safety should be diminished.

“All of these recommendations amount to a further tilting of the industrial relations balance in favour of employers.”

All of these recommendations amount to a further tilting of the industrial relations balance in favour of employers. I say that it would further tilt the balance in favour of employers because already our system of industrial relations is one of the most unbalanced in the world. From a union point of view ours are probably the worst set of industrial laws in the developed world.

Now if you doubt the objectivity of that statement let me refer you to this document “The Report of the Committee of Experts on the application of Conventions and Recommendations”. This is the report of the Committee of Experts of the International Labor Organisation (ILO). It is a report on how each country stacks up against the various ILO Conventions to which those countries are a party. This is not an old document. It has been prepared in the last few months in preparation for the International Labor Conference to be held in June of this year. And this is what it says about Australia:

Noting with regret that the government states that no legislative reform is proposed, the committee recalls that; workers organisations should be able to take industrial action in support of multi-employer agreements; providing in legislation that workers cannot take action in support of a claim for strike pay is not compatible with the Convention; prohibiting industrial action that is threatening to cause significant damage to the economy goes beyond the definition of essential services in the strict sense of the term.

The document concludes:

The committee requests once again the government to amend the provisions of the Act, to bring it into conformity with the Convention.

And I have only just taken you to one small part of a much larger document which extensively criticises Australia’s system of industrial laws.

So already we have a system of industrial laws which favours employers. And the proposals from the Royal Commission are about tilting that balance even further in favour of employers.

Now I am not saying that there isn’t a positive industrial culture amongst many companies in Australia. I am not saying that we are not a democracy. And I am not saying that there is no freedom of speech in this country. But I am saying that the set of industrial laws being proposed by this Government are more characteristic of a South American dictatorship than they are of the liberal democracy that we hope to be.

“… there is no other law in the land which puts one person so much at the mercy of another as John Howard’s legislated scheme of Australian Workplace Agreements.”

And this is all because this Government somehow believes that industry wide bargaining is a rort, that site agreements are a rort, that multi-employer negotiations are a rort, that at the end of the day collective bargaining is a rort. They believe that the only true form of industrial relations is when a company has the right to deal with each and every individual employee on their own.

Well let me tell you that that is a rort. How can it be fair to pit a construction worker who might have a base salary of $40,000 against companies which have revenues of $10 millions and sometimes $100’s of millions. And we don’t ask these parties to negotiate a car lease or even a mortgage which might take up 40% of that worker’s income. Instead we ask them to negotiate the one contract which affects 100% of that worker’s income: namely their contract of employment.

If we transposed this situation with its inequalities in bargaining power to a commercial context regulated by the Trade Practices Act and Common Law doctrines of unequal bargaining power then it simply would not be allowed. But under the Workplace Relations Act such negotiations are completely lawful. In fact there is no other law in the land which puts one person so much at the mercy of another as John Howard’s legislated scheme of Australian Workplace Agreements. And that is a rort.

“… an issue which affects all workers in Australia.”

Because the agenda which is sought to be applied to construction is one that we know the Government wants to apply to all workers in Australia; we do not see this as an issue which just affects construction workers, rather we see it as an issue which affects all workers in Australia. And to that end the Royal Commission is not so much about the construction industry as it is an attempt to use the construction industry to lead this Government’s industrial agenda into the whole Australian workforce.

And so just as we did with the Maritime Union, and with the Mining Division of the CFMEU, and with the Meatworkers Union, so we will do with the Construction division of the CFMEU. Nothing has done more to unite the CFMEU and to unite the union movement behind the CFMEU than the Cole Royal Commission. And so make no mistake: over the coming weeks and months as you look at the Construction division of the CFMEU and indeed the other construction unions, the ETU and the AWU, look behind them. Because there you will find standing the Australian Council of Trade Unions and the entire Australian Union Movement.

Committee for the Economic Development of Australia, CEDA Conference Centre Melbourne, Richard Marles, Assistant Secretary, ACTU, Tuesday 20 May 2003