The building industry regulator has abused its power by rejecting a valid workplace agreement in a bid to make it more “productive”, the Electrical Trades Union has alleged in a test case.
The ETU has launched a federal court case challenging the regulator, Fair Work Building and Construction, for its assessment rejecting an agreement mandating contractors be paid the same as employees and granting union consultation and representation rights.
Under the 2013 building code companies seeking to bid for government work must comply with certain conditions on their industrial agreements with employees.
But the union alleges FWBC rejected the Appselec Qld draft agreement on the basis it infringed an aspirational objective, not a hard requirement, in the code.
The objective states that agreements should promote “fair, cooperative and productive workplace relations in the building and construction industry”.
The regulator claimed that clauses allowing employees to attend union meetings unpaid for up to four hours a week and requiring consultation before a company hired labour or contractors infringed that objective.
FWBC also objected to a clause requiring that head contractors “pay the difference” between their rates of pay for their regular employees and the employees of subcontractors.
The clause is common in the building industry and ensures workers are paid the same regardless of contracting arrangements, providing job security by decreasing the incentive to contract out work.
In its assessment of the deal, the regulator said such a clause constituted an “unregistered agreement”, which is also banned by the code.
The case is the first time a union has challenged decisions made by FWBC since the minister of employment transferred the power to assess deals from the employment department to the building industry regulator in May.
The ETU is angry that clauses of the type rejected are contained in dozens of agreements in the electrical contracting industry and many more in the building industry, including ones that passed the test when it was applied by the department.
The ETU national secretary, Allen Hicks, said FWBC had “abused its power and disrupted the rule of law within the industry by using spurious grounds to disqualify perfectly legal agreements”.
Hicks accused FWBC of “haphazard” intervention in collective bargaining and “ignoring the legal parameters of their role”.
“The agreement in question is 100% legal under the Fair Work Act but the FWBC seems determined to strike it out as part of their own ideological agenda, simply to frustrate the collective negotiations between working people and their employers.”
The union is asking the court to quash FWBC’s decision, which would in effect force the regulator to pass the industrial agreement.
The controversy demonstrates the industrial strife that could be unleashed if the 2014 building code, which is attached to the Australian Building and Construction Commission bill, is passed.
The newer version of the code, which is not yet in force, goes further than the aspirational objective of productive workplaces and actually bans agreement clauses that limit a company’s ability to “manage its business or to improve productivity”.
Employment law expert and Adelaide law school professor Andrew Stewart has told Guardian Australia the 2014 code is a source of significant concern in the construction industry because many agreements will have to be renegotiated to meet the stricter standards.
The 2014 code will in effect be retrospective because it will bar companies from government work based on the content of agreements struck after 24 April 2014.
“Virtually every major builder will be non-compliant,” Stewart warned, because of its retrospective effect and because it barred such a wide range of content.
“It essentially gives [FWBC director] Nigel Hadgkiss or whoever is the director of the ABCC discretion to object to any union agreement on a very wide number of bases.”
A FWBC spokesman told Guardian Australia: “FWBC undertook an assessment of a draft enterprise agreement and will defend its position in this case.”
He said further comment was not appropriate as the court case is on foot.
“Feedback on proposed agreements is provided on a confidential basis to contractors who submit an agreement for assessment.
“It would be inappropriate for FWBC to disclose this feedback publicly.”
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