Employers Take Note: Legislative Overhaul in the Construction and Road Transport Industries
Tuesday’s Senate sitting proved to be a productive night with two new bills passed through the upper house between 6:00pm and 10:00pm that will have significant impacts on the construction and the road transport industries. Both new bills were pushed through the Senate by Labor, with the assistance of the Greens.
BUILDING AND CONSTRUCTION INDUSTRY IMPROVEMENT AMENDMENT (TRANSITION TO FAIR WORK) BILL
The Office of the Australian Building and Construction Commissioner (the ABCC) will soon be abolished, and its replacement, Fair Work Building Industry Inspectorate (the Inspectorate), will begin operation within the ambit of Fair Work Australia.
The legislative change reduces the amount of financial penalty that can be imposed for unlawful industrial activity bringing those penalties in line with other industries. The maximum penalties available now stem from the Fair Work Act (Cth) (2009) reducing from $22,000 to $6,000 for individuals, and reducing from $110,000 to $33,000 for corporations. The changes also prevent the Inspectorate from prosecuting parties that commit unlawful industrial activity where the parties have previously come to a formal settlement, whereas under the ABCC proceedings could commence even where parties had finalised matters.
Despite the Opposition stating that the Inspectorate will be a ‘toothless tiger’, the Inspectorate will importantly retain its coercive powers allowing it to compel people to provide information relevant to an investigation, although those powers will be phased out over a three year period subject to a government review.
Employers in the construction industry should be aware that the ABCC’s replacement by the Inspectorate means that there is now less incentive for employees not to engage in unlawful industrial activity. A carefully drafted contractual clause allowing your business to seek compensation for any loss suffered as a result of unlawful industrial activity may restore some of the lost incentive. Even if in reality your business would be unlikely to enforce such a clause, the mere presence of the clause and the threat to enforce may suffice.
THE ROAD SAFETY REMUNERATION BILL
The new Road Safety Remuneration Tribunal (the Tribunal) will begin operating from 1 July 2012 and will be an integral regulatory body in the road transport industry.
Proponents of the Tribunal’s creation claim that there exists a direct link between the level of road transport drivers’ remuneration and the level of risk to safety that those drivers take. For instance, proponents claim that drivers are often ‘forced’ to take unnecessary risks (such as speeding and overloading loads) in order to make a decent living.
In summary the Tribunal will have the power to:
- inquire into issues and practices within the road transport industry;
- determine mandatory minimum rates of pay and related conditions; and
- resolve disputes between drivers and their hirers or employers.
The Tribunal will make determinations known as Road Safety Remuneration Orders (the Orders), and it will be able to act both upon application and on its own initiative. The Orders will apply to employee drivers in addition to employment entitlements arising out of their employment contracts and other industrial instruments. It is envisaged by the Federal Government that the Orders will reduce the incentive for drivers to need to take risks and cut corners in order to meet deadlines.
Employers in the road transport industry ought to appreciate that after the Tribunal’s commencement of operation later this year, it will begin to play in an integral role in imposing minimum employment conditions and entitlements for road transport drivers.